Someone Just Bought an NFT of a House for $175k and Everyone is Asking Why

20 October 2022

in NFT

Reading Time: 4 mins read

A three-bed house in South Carolina has been sold as an NFT (non-fungible token) to a real estate investor for $175,000.

The sale of the house was paid for in USD Coins—a digital stablecoin pegged to the United States dollar—through the NFT marketplace Roofstock onChain.

“I never imagined I could buy and finance a house with a simple click, rather than going through the time-consuming and cumbersome traditional settlement and mortgage process,” said Adam Slipakoff, a seasoned real estate investor and the buyer of the property, in a press release.

“Instead of waiting months for underwriting, appraisals, title searches and preparing deeds, I was able to buy a fully title-insured, rent-ready property with one click.”

Stock image of houses in South Carolina. A home in Columbia, South Carolina was recently purchased as a non-fungible token (NFT) for $175,000, sparking outrage and confusion on social media as to the legitimacy of the new ownership.
Getty

Twitter users pounced on the news of the crypto-based purchase and questioned its legitimacy. User Weezie1317 said, “Can’t wait for the litigation over this.”

@NeaCais simply said, “Worst idea ever.” LA realtor ArmandoCenturus said, “As a real estate agent, this shocks me.”

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This house sold as a real word NFT for $175,000 over the weekend.

The way it works:
– The LLC takes ownership of the property
– They tokenize the property & mint an NFT that represents ownership of the house
– Holding the NFT gives you ownership of the actual house pic.twitter.com/fuUl3oGCHx

— unusual_whales (@unusual_whales) October 18, 2022

Some users were left feeling confused about the process in the longer run. Others were skeptical about the legitimacy of the sale as there was seemingly no deed transferred to the buyer.

[crypto-donation-box]

BenjiSmeeth said, “Too bad no laws exists around this. You’re still going to need a deed to actually legally own this house.”

Others were more optimistic. ClearwayCapital said, “I always thought as the NFTs a digital ownership title. It has a bright future with cars, domestic animals, cattle, traditional art, wine, basically anything. Real Estate is the most inefficient, because in this case for example, there is two layers of titles.”

This South Carolina home is not the first property to be bought as an NFT. A four-bedroom Florida home was bought earlier in 2022 for $653,000.

NFTs are generally used to sell digital collectibles—such as art and music. The ownership of these NFTs is transferred and verified through the blockchain—a decentralized and secured log on the internet.

The LLC of the company that sold the home creates an NFT representing ownership of the home, and whoever purchases that NFT then has ownership of the property.

Though the purchase is digital, the ownership is very real, as whoever owns the NFT now owns the physical home in the real world.

The historic purchase marks the start of what could potentially be the future of real estate as NFTs, possibly opening doors to make crypto purchases for real estate a viable source of funding.

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