In a brightly lit men’s restroom Friday afternoon, adjacent to where the inaugural Crypto & Real Estate Summit was convening, one conference attendee asked another, “Are you a real estate agent?”
“Yep, and you?”
“What do you think of all this?”
“I’m not quite sure how it works with a mortgage.”
A third person approached and said, “We should talk.”
The brilliant sunshine outside the Miami Beach Convention Center was matched by summit attendees who effused that crypto assets and blockchain technology will enter into residential real estate and benefit agents, investors, and tech wheelers-and-dealers alike.
The two-day conference was organized by Propy, (pronounced either “Pro-p” or “Prop-e” by summit goers) a Palo Alto, California company behind the first and only U.S. sale of a non-fungible token that indirectly conferred ownership of a single-family home.
Propy seeks to expedite the home sale process by doing deals over a blockchain platform. Should Propy succeed, they would change and maybe jeopardize the business of title insurers (the initial sale did not obtain such insurance).
Real estate agents, on the other hand, would benefit from blockchain transactions, the company has claimed.
“We’re giving power to the people,” said Natalia Karayaneva, CEO of Propy. “Instead of corporations like Zillow, you the agents have the power.”
(Incidentally, Zillow CEO Rich Barton said on the company’s most recent earnings call that Zillow is providing, “Power to the people.” But the people Barton was referring to would seem to primarily be consumers, not agents.)
Karayaneva urged real estate agents to get on board and become “crypto certified,” an unofficial designation the company bestows following training and course work.
Agents who don’t, warned Tom Ferry, a real estate coach and keynote speaker Friday, will be left behind.
“Can you actually be culturally relevant in this business and not have a bomb-ass YouTube channel?” Ferry rhetorically asked, before noting: “Where is your YouTube video on options for buying homes through any cryptocurrency?”
What does it mean for an agent to be engaged with the world of crypto? There are a few different answers.
One is agents experimenting with brokering properties on various metaverse platforms such as Sandbox and Decentraland. Another is educating agents about how they can turn property ownership rights into NFTs and conducting the exchange of those NFTs on a blockchain platform (the first such U.S. sale was conducted on Ethereum).
But the most basic step an agent could take, multiple speakers said Friday, is becoming comfortable with consumers using crypto assets instead of dollars or bank loans.
Over 11% of U.S. homes sales in 2021 used crypto toward a down payment, according to a recent Redfin study.
Like the aforementioned men’s room congregants, the more than 100 agents who attended the conference brought with them some basic questions. (The mortgage question, from this reporter’s work, was not sufficiently answered, though companies are beginning to NFT promissory notes of a loan.)
Some were over the concepts themselves – what is an NFT? (It’s a digital token that represents ownership of an asset.) Others were legal and tax questions – if you fractionalize an NFT does it become a security and become subject to the Securities Act of 1933? (We’re not sure, but crypto is essentially taxed right now like capital gains.)
Still, others were more philosophical. “Who really benefits from real estate NFTs?” an audience member asked during a question-and-answer session with panelists.
“Anyone and everyone,” replied Moshin Masud, CEO of AKRU, a Cincinnati-based commercial real estate company. “It’s trading in seconds.”
Carlos Domingo, CEO of Securitize, a Miami company that creates digital securities, subsequently clarified that people who will not benefit are those who add needless friction to real estate deals. Domingo did not specify these culprits.
Other questions were answered by saying that, while the future is not now, it’s coming soon. “There is so much I want to tell you,” said Rick Teed, founder of San Francisco based Teed & Co. “But we can’t because we haven’t yet announced.”