Don’t be threatened by new advancements that you don’t yet understand. Instead, think about their positive impact on the industry, and educate yourself on the ins and outs of virtual real estate — because your clients will be asking about it.
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Welcome to the next dimension of real estate. Real estate investments are now being driven by a core belief that we are in the midst of a fundamental shift with emerging and disruptive technologies.
Blockchain, cryptocurrency and other technological advancements are likely to shape the future of real estate in the year ahead. With more buyers and sellers showing interest, it’s essential for real estate professionals to have an understanding of the fundamentals.
Globally, businesses are hyper-focused on the blockchain, nonfungible tokens (NFTs) and the concept of metaverse integration. Although there is much skepticism around these technological advancements, it’s important to stay in the know and educate yourself.
We’ve been in communication with clients who are investors in the crypto world, NFTs and the metaverse. We even recently sold a home staged with the owner’s entire NFT collection. We aim to advise buyers and sellers who might be interested in using their crypto investments for upcoming property investments or diversifying their assets into real estate.
As we recently reported in our new newsletter, The BluePrint, here’s our take on these advancements as you navigate through this year.
If you’re looking to expand your real estate career, try selling in the metaverse. Investors are buying up land and houses in Sandbox, Decentraland and other virtual worlds. Last month, Republic Realm, a virtual real estate developer, announced it paid a record-setting $4.3 million for acreage in Sandbox.
Agents are already seeing the potential in this niche. In fact, the metaverse already has its first luxury real estate brokers. Just like in the physical world, these specialized agents help users purchase or rent houses in hotspot areas, near their friends or by popular attractions.
These transactions are usually made using cryptocurrencies, like Bitcoin or Ethereum. Because if you’ve got the virtual cash for a second home, why not make it a virtual one!
Cryptocurrency and blockchain
Cryptocurrencies are digital money that is traded and exchanged over the internet. It can be used to buy and sell goods as well as invest and build wealth. Cryptocurrency is being used to trade property, and it’s important to realize the positive outcomes it can have for buyers and seller.
Blockchain is the underlying tech that supports cryptocurrencies, and it has plenty of applications across industries. A blockchain stores information about cryptocurrency and token trades in chronological order.
This allows you to track the first trades, as well as assigning numbers to each user of the blockchain, ultimately disclosing ownership that cannot be altered or tampered with.
There are a number of ways we understand cryptocurrency and blockchain can have a positive impact on our industry. One is by decentralizing, ultimately reducing liquidity risks and even the playing field with financial institutions.
It also can help speed up the transaction process in deals, decrease closing costs and create more efficiency in legal verification, documentation and financing of a property.
Don’t be threatened by new advancements that you don’t yet understand. Instead, think about the positive impact on industry for future generations to come. Educate yourself on the ins and outs of virtual real estate because we can guarantee your clients will be asking about it.
Educate yourself on what cryptocurrency is and how blockchain can support the real estate industry. The metaverse is a space agents need to follow because this is happening and it’s happening fast.
David Parnes is a director at The Agency in Los Angeles. Connect with him on Instagram. James Harris is a director at The Agency in Los Angeles. Connect with him on Instagram.