In early February of this year, Leslie Alessandra sold a home in Gulfport, Florida for $654,310. That sale made real estate history as the first home sold as an NFT (Non-Fungible Token) on a US blockchain.
The home and other properties that have since been sold as NFTs and paid for in cryptocurrency all herald a change coming to the real estate industry. Like other assets that have been tokenized as NFTs on the blockchain—art, season tickets, carbon credits, and more—property NFTs are gaining traction because they solve real-world challenges like process efficiency and ownership verification transparency.
Streamlining real estate transactions using NFTs
Selling a home is traditionally a long, cumbersome and expensive process. From the initial listing of a home to the final closing, offline real estate transactions can take weeks or months. Obtaining and negotiating offers, confirming title and ownership and completing necessary contracts and paperwork add extra time and costs.
Tokenizing a home as an NFT offers powerful benefits to businesses and consumers alike, including clear digital ownership that is irrefutable and permanently embedded in a blockchain for all to see. Interested buyers should be able to quickly and easily see previous owners, tax records, price history and any legal disputes involving the property. For estate agents and property management companies, an NFT can also be marketed more easily and more broadly. As for Alessandra’s Gulfport home, the auction drew nearly 3,000 bidders.
In addition, real estate NFTs help streamline or replace slow and expensive third-party processes such as title insurance and escrow. And as with other NFTs, the actual transfer of the property and funds can be completed securely and almost instantly, without all the paperwork and back-and-forth nature of the traditional closing process.
Real estate NFTs also present exciting opportunities beyond traditional one-to-one home sales. For example, the NFT may represent the homeowner’s contractual obligation to pay a property or HOA fee/contract. Ownership through an NFT can even make borrowing against a home easier and faster by bypassing much of the extensive due diligence and paperwork required by traditional financial institutions for a home loan or line of credit.
Real Estate NFTs on the XRP Ledger
The world of real estate can be complex and anyone who has bought, sold and/or rented a home knows that it can be an extremely tedious process, especially for those of us who are not well versed in the jargon and stuff. – and out of the industry.
In an effort to simplify the home buying, selling and renting experience, Ripple partner ProprHome will leverage the XPR Ledger to create and distribute NFTs that will represent property ownership. The company leverages the speed and reliability of XRPL to bring greater confidence and efficiency to the Portuguese real estate market. ProprHome is also launching a robust NFT and real estate program to help new users understand and maximize their experience.
And because Portugal has Europe’s highest concentration of estate agents, ProprHome will help marketers find the best by issuing a reputation currency that can be earned for good practice and then redeemed or traded for advertising and extra exposure.
XRPL: Purpose built for NFTs
Companies like ProprHome are turning to XRPL as a fast, affordable and secure public blockchain because it has proven ideal for the settlement of NFTs and other tokenized assets at scale.
NFT transactions on XRPL close in less than five seconds, cost only a fraction of a penny and eliminate the need for complex smart contracts. XRPL can also handle high transaction volumes, and important NFT functions such as minting, burning and trading are pre-programmed as native functions in the ledger, making it user-friendly and well suited to benefit large real estate firms or governments.
The inherent benefits of XRPL are enhanced by Ripple’s ongoing support for utility-based NFTs. Through our $250 million seed fund to advance new NFT use cases, we’re excited to see what the future holds for functional NFTs—from real estate and carbon markets, to media and entertainment, and more.
To learn more about NFT support on the XRP Ledger, visit XRPL.org.
Want to get started creating your own NFTs on XRPL? Wave 3 applications are now being accepted for Ripple’s Creator Fund. Learn more and apply today.
