How Crypto is Evolving Luxury Real Estate in the USA

What if buying a piece of real estate wasn’t a complex and time-intensive process? Real estate transactions often involve dealing with an intermediary and navigating through the paperwork.

Many jurisdictions require sellers and buyers to be present in person in order to sign documents, despite the advances in technology. This is often due to the fact that notaries are required to physically sign documents. While some notaries have this capability, others do not.

With the advent of cryptocurrency (specifically smart contracts and NFTs), real estate transactions are rapidly changing. We’re talking about taking out the middleman and obtaining and transferring ownership with ease. Sites similar to eBay can also be used for sales, with an added layer of security.

In this writing, we will be specifically focusing on crypto’s effect on the luxury real estate market. But first, let’s start with the basics—how NFTs and smart contracts work.

What does an NFT mean?

Non-fungible tokens (NFTs) are cryptographic tokens which can be in many forms, such as music, drawings and videos.  Each NFT can only be reproduced and replaced once it is created. Digital ownership can be represented by NFTs, which could include a digital piece of art or a digital copy of a particular item. Sometimes, NFTs can represent physical items, like real estate or memberships.

NFTs use Blockchain technology to verify their ownership and provide proof of ownership. Although the NFT’s digital files can theoretically be copied, this doesn’t mean someone is in possession of them. The culprit would need access to the smart contract that’s attached to the NFT as well. They would also need to have the ability to modify the smart contract already recorded on the Blockchain, something that is almost impossible.

What exactly is a smart agreement?

Smart contracts, which are pieces of code that can execute themselves to aid in transactions, allow for transactional automation. After pre-defined conditions are met, the transaction will automatically be completed. Following recording, the codes are added to the blockchain.

They can be binding and do not need to be influenced by any legal or central authority. Because of this, they’re much more cost-efficient. Attorneys, appraisers and realtors don’t come cheap.

What are these two ways to transform luxury real estate

These two factors are changing luxury realty by eliminating intermediaries. But, there is another way to do it: innovating memberships. If you’ve ever owned a timeshare or had a country club membership, you probably know that ownership is not easily transferred. Your package usually includes an annual renewal and dues.

Assets can now be purchased in perpetuity with memberships like the Aspen Lakes Membership from RHUE Resorts. If desired, assets may even be transferred to family and friends. Conversely, memberships can be sold in secondary markets such as OpenSea, an NFT marketplace that’s similar to eBay.

Aspen Lakes Members can take advantage of the NFT Membership model.

  • There is very little to no process for applying or paying fees
  • No annual recurring dues
  • Transferability without middleman (no need for intermediaries)
  • The existing amenities include a 18-hole championship golf course, pro shop, restaurant, and wedding venue.

NFTs cannot be bought with cryptocurrency. This can make it difficult for some investors to invest. This is being addressed by RHUE Resorts, which allows the purchase of memberships using cryptocurrency and debit/credit card. It allows them to reach the traditional market and engage crypto-enthusiasts.

City DAO

City DAO, a crypto project is another example. It is possible to purchase land in Wyoming for a small amount of money and transfer ownership rights to others. To be part of the government, you must apply for a Certificate of Citizenship via NFT. It’s important to note that citizens are not the owners of the land. Only they can make decisions concerning it.

Of course, in this kind of “government” structure, there are only so many memberships that can be purchased.

FlyFish Club

FlyFish Club (FFC), brings an innovative spin to the food business. The private dining club hosts the world’s very first NFT restaurant that requires an NFT membership for dining access. Said restaurant will feature over 10,000 square feet and be in an “iconic location” in New York City. In addition, FFC NFT purchasers can enjoy “various culinary, cultural, and social experiences,” according to the FlyFish Club website. The project makes several big promises, however, it’s still in its infancy.

Great ideas and offerings

While NFTs and blockchain are opening doors in several industries, it’s still hard to tell which ventures are going to “stick.” Projects like City DAO have interesting ideas but have yet to provide anything concrete. RHUE resorts on the other side is thriving and providing real luxury.

Blockchain promises to change many industries due to its numerous efficiencies and benefits over other options. Real estate has shown that it’s ripe for improvement and looks to be the perfect candidate to enter the world of cryptocurrency and NFTs.

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