For the first time ever, a woman in Florida just succeeded in purchasing a home close to Tampa through non-fungible tokens (NFTs).
The home contains 5 bedrooms, three and half bath house.
According to the Chief Executive Officer of Propy, Natalia Karayaneva, history has been made since they are the first company to facilitate such online auction as well as transaction. As of when the sale occurred, the cost was around 210 ETH (approximately $653,000).
The identities of around 50 individuals had to go through some verification processes during the auction. In the end, 2 bidders were approved. Each of them was required to have digital wallets containing minimum of $653,000.
Due to a Non-Fungible Token (NFT) being involved, the process wasn’t straightforward.
For instance, there were steps that needed to be taken by parties involved to ensure it was successful. The first was having the house ownership transferred to a company (LLC) from the seller. Once the winner in the auction has been identified, ownership of the home will be transferred to him/her. The seller is going to receive payment in the form of crypto (ETH). Furthermore, Propy received a flat fee based on the services that it rendered.
There are companies that have tried to use cryptocurrencies in the sale of real estate properties before now. Red Swan CRE Marketplace allows investors that are based in the US to become owners of commercial properties through digital tokens. Blockchain is where this was recorded. It should be noted that last year, Propy also succeeded in selling the apartment of Michael Arrington, founder of TechCrunch, for around 96 ETH. As of then, this was worth approximately $93,000.
According to Natalia Karayaneva, the legal team of Propy had to come up with the idea of LLC to make the transfer process smooth and instant. She explained that prior to the auction, some processes had to be carried out by Propy. These were inspection, obtaining title report, conducting of title search, and many others. People that had registered for the auction were given an invitation to enable them check out the home physically. They were also allowed to review all the necessary documents. This was to ensure it was what they actually wanted to purchase. According to Karayaneva, it was all about meeting the expectations of potential buyers without any compromise.
She pointed out that there was a bureaucratic process they experienced during the auction. This was when they had to verify the identities of bidders. It involved checking their IDs, names and wallets they had connected. All of these were done in line with the stipulations of KYC rules.
Contrary to what most people are thinking, the woman who bought the house eventually wasn’t the highest bidder. In other words, there were people who offered much higher bids. The problem was that these bidders didn’t follow the process of online auction and NFT. 24 hours after the house was sold for $653,000, the price of ETH dropped in the market. This made the house to be valued at $613,000.
The goal of Propy is to make the process of buying houses less complicated for potential buyers. Karayaneva also revealed that in the month of March, the company plans to sell a home in Tampa via NFT. There are also other listings in places like Chicago and San Francisco. Contrary to the cryptocurrency that has been used in this week’s sale, the next transaction is going to involve the use of USDC. This cryptocurrency is quite different from Ether because its value is equivalent to that of the US dollar.
Karayaneva also explained that Propy had plans of allowing buyers take out mortgages in the future via Stablecoin, a USDC technology. This will limit the number of bidders since buyers are expected to make full payments.