In the latest sign that the property industry is finding NFTs a new sales tool, Roofstock, a digital real estate platform, sold a single family home in South Carolina for $175,000 via its NFT marketplace built on Origin Protocol.
The sale was settled using the USDC stablecoin and financed by USDC Homes, a lending pool operating on the Polygon deployment of Teller — a decentralized lending marketplace.
USDC Homes works with a network of underwriters and data providers to verify the identity and creditworthiness of borrowers. The platform offers both secured and unsecured lending options, with ETH, BTC, USDC, and other cryptocurrencies supported as collateral. Borrowers can submit off-chain data to support their creditworthiness when applying for loans.
“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.”
USDC Homes also offers financing options for sales on the Roofstock onChain marketplace. Prospective buyers can apply to borrow with a loan-to-value ratio of up to 80%.
Each home is titled in a limited liability company and is associated with a unique NFT on the Ethereum blockchain.
When the lender approves and funds the borrower’s request on Teller, the USDC Homes platform uses the funds to purchase the LLC NFT. The NFT is then transferred to a multisig wallet that serves as an escrow account until the borrower pays back the entire loan and accrued interest.
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“We are excited for USDC Homes to power financing capabilities on Roofstock onChain’s property marketplace,” said Ryan Berkun, Teller’s founder and CEO. “Now, their users will be able to finance real estate purchases with crypto loans on-chain.”
Kash Razzaghi, the chief revenue officer of Circle, the company behind the USDC stablecoin, described the sale of the South Carolina home as an “exciting milestone” for the NFT real estate sector.
The NFT-based real estate transaction turned heads on social media, but concerns mounted about what would happen if a wallet holding one of Roofstock’s NFTs is compromised.
“Is the deed transferred on chain?” asked Twitter user goof_eth. “If so, how do we plan to mitigate risks of lost or stolen ‘properties’?”
“This seems like a very important question,” added crypt0potamus. “With Bored Apes, you have to change your PFP if you get hacked, but with this, you have to move out of your house.”
Sanjay Raghavan, the head of web3 initiatives at Roofstock, responded that the NFT can only be transferred to a recipient who possesses a non-transferable soul bound membership token and has doxxed their identity with the firm. “If you lose your private keys, we can de-platform the prior token and issue you a new one,” said Raghavan.
CORRECTED on 10/19 @ 1245 ET Headline and lead changed to reflect that the sale took place using Roofstock onChain, not OpenSea