50% of transactions can be done in crypto, bullish on NFTs

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Cryptocurrency is making its way into real estate, the latest sign of the gradual use of digital coins in daily transactions outside of market trading – and at least one top broker thinks that’s only the beginning.

Lane Rettig, a former lead developer of Ethereum cryptocurrency (ETH-USD), recently bought a $ 3.5 million apartment in Central Park North in Harlem, New York. The sale, led by real estate brokerage firm SERHANT and NestSeekers International, holds the record for the largest condominium deal in Harlem so far this year.

Rettig paid for the condo the old fashioned way – with dollars. But Ryan Serhant – CEO and founder of the real estate brokerage house that bears his name – is a true believer in crypto in real estate. Rettig is emblematic of many of the buyers he sees now, who have built up wealth in crypto looking to buy real estate, Serhant said.

“We see a lot more [crypto buyers] now that we only did in 2020 and the first half of 2021, ”Serhant told Yahoo Finance. “People have amassed wealth, now they’re trying to figure out how to keep it, and they say, let me put it into a tangible asset.”

He added, “In the same way that cash-rich people take money out of banks and put it in real estate as a kind of inflation hedge, we are seeing something similar with the crypto community. Customers are looking for ways to diversify.

According to Serhant, people have created so much wealth in cryptoassets that they are able to reduce the purchase price by 50-70% using the cryptocurrency. Then they will fund the remaining amount because the remaining amount is now so small.

“Ordinarily, they wouldn’t even have been able to afford the apartment if you had gone to a bank and got the standard credit rating compared to your W-2s,” he told Yahoo Finance. “So it’s opening up the property to even more people. “

The real estate pro is working on a nearly $ 40 million all-crypto deal, a lower Manhattan penthouse with no loans involved, and insisted the market would see more of these deals .

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Already, there has been a sprinkling of residential properties in New York City – and last month the first commercial property – as well as ski houses on the West Coast – were sold in full crypto.

This is at the start of the crypto space, but Serhant predicted that over the next five years, 50% of real estate transactions in the United States will somehow be done with cryptocurrency.

Currently, a barrier to further adoption is the volatility of crypto and the inability of financial institutions to keep it on their books. Still, Serhant believes that eventually there will be direct wallet-to-wallet transactions where the crypto can be transferred instantly from buyer to seller.

He also believes that new development projects that pay off construction loans will ultimately be settled with Bitcoin (BTC-USD) or Ethereum.

“It’s not yet, but we’ll get there,” he told Yahoo Finance.

Crypto will change real estate contacts

MILLION NEW YORK DOLLAR LIST – Pictured: Ryan Serhant – (Photo By: Greg Endries / Bravo / NBCU Photo Bank via Getty Images)

When purchasing his property in Harlem, Rettig flirted with – but ultimately decided not to – use crypto for the purchase.

“We had an honest conversation with the developer about the possibility of doing this in crypto. They were very open-minded about it, ”Rettig told Yahoo Finance, before taking the more traditional route to close the three-bedroom, two-bathroom home with panoramic Central Park views.

Rettig said it was more of a logistical compliance issue for the developer and how he receives it and keeps a deal with crypto-denominated debt. Still, he said he believed he was able to get a slightly larger mortgage because of the crypto assets he owns.

Nonetheless, Serhant is all about the future of blockchain in real estate.

“We still sign contracts over the internet with a PDF signature and then email them the same way we did in 1996. We haven’t advanced technologically in the way we buy and sell real estate,” explains Serhant.

Crypto, he argued, “is going to change that. You will sign contracts in the form of an NFT, ”he added. “We’re probably not going to call it an NFT. You will always feel like you are signing a contract.

Additionally, he believes the way the contract is held, recorded, held, and tracked will be on the blockchain in the form of a non-fungible token (NFT), which opens the door to mass investment and ownership. of luxury real estate. He sees a future in which entire transactions can be executed using NFT, and even used to collect rent.

“You basically become an investor without all of the headaches,” he told Yahoo Finance. “It’s much safer; and I think you’re going to start to see a lot of things like this.

For more information on cryptocurrency, see:

Dogecoin, what is it? How to buy it

Ethereum: What is it and how do you invest in it?

The 21 best crypto leaders to watch in the second half of 2021

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