Utility-Based NFTs: Real Estate Problem-Solving

Utility-based NFTs are now making an uproar for bringing benefits and use to most everything including being a solution to real estate problems.

Leslie Alessandra sold a home in Gulfport, Florida for $654,310 in early February of this year. That transaction made real estate history by being the first home in the United States to be sold as an NFT (Non-Fungible Token) on a blockchain.

The property and other properties that have since been sold as NFTs and paid for in bitcoin foreshadow a major shift in the real estate sector. Real estate NFTs, like other assets tokenized as NFTs on the blockchain—art, season tickets, carbon credits, and more—are gaining appeal because they address real-world issues such as process efficiency and ownership confirmation transparency.

Using NFTs to Simplify Property Transactions

Traditionally, selling a property is a time-consuming, inconvenient, and costly procedure. Offline real estate transactions can take weeks or months from the first listing of a home to the final close. Soliciting and negotiating offers, confirming title and ownership, and completing the necessary papers and documentation all take time and money away from the sale.

Tokenizing a property as an NFT provides significant benefits for both enterprises and consumers, such as transparent digital ownership that is irrefutably and permanently entrenched on a blockchain for all to see. Prior owners, tax records, pricing histories, and any legal challenges surrounding the property should be freely accessible to prospective buyers. An NFT can also be more simply and widely marketed by real estate firms and property management organizations. The auction for Alessandra’s Gulfport home garnered nearly 3,000 buyers.

Furthermore, real estate NFTs serve to streamline or replace time-consuming and costly third-party processes such as title insurance and escrow. And, as with other NFTs, the actual transfer of property and monies can be performed safely and nearly instantly, without all of the paperwork and back-and-forth of the typical closing procedure.

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Real estate NFTs offer exciting potential in addition to typical one-to-one home sales. The NFT could, for example, represent the homeowner’s contractual obligation to pay a title or HOA fee/contract. Ownership through an NFT may even make borrowing against a house easier and faster by avoiding much of the necessary due investigation and documentation required by traditional financial institutions for a mortgage or line of credit.

NFTs for Real Estate on the XRP Ledger

The world of real estate may be complicated, and anyone who has bought, sold or rented a home knows that it can be a time-consuming process, especially for those of us who are unfamiliar with the language and other intricacies of the industry.

Ripple partner ProprHome will use the XRP Ledger to issue and distribute NFTs that will reflect property ownership in an effort to streamline the home buying, selling, and renting experience. The organization is exploiting the XRPL’s speed and dependability to increase confidence and efficiency in the Portuguese real estate industry. ProprHome is also launching a comprehensive NFT and real estate literacy education to assist new users in understanding and maximizing their experience.

And, because Portugal has the biggest concentration of real estate agents in Europe, ProprHome will assist market participants in identifying the finest ones by introducing a reputation currency that can be won for good practices and then redeemed or traded for advertising and additional visibility.

XRPL: Designed for NFTs

Companies such as ProprHome are turning to the XRPL as a quick, low-cost, and secure public blockchain since it has shown to be appropriate for the scale settlement of NFTs and other tokenized assets.

NFT transactions on the XRPL are completed in less than five seconds, cost a fraction of a penny, and do not require sophisticated smart contracts. The XRPL is also capable of handling enormous transaction volumes, and important NFT functions such as minting, burning, and trading are pre-programmed as native capabilities on the ledger, making it user-friendly and well-suited to benefit major real estate corporations or governments.

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The ongoing support that Ripple provides for utility-based NFTs is one factor that contributes to the inherent advantages of the XRPL. We’re enthusiastic to explore what the future holds for functioning NFTs, from real estate and carbon markets to media and entertainment, and beyond, through our $250 million Creator Fund.

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