News outlets are reporting that a home in Gulfport, Florida, was put up for auction for non-fungible token (NFT). The property was subsequently transferred for about 210 Ethereum, a type of cryptocurrency, which converted in cash to approximately $631,790.

Although the transfer was billed as the first property exchange using cryptocurrency, the truth is hundreds of properties have been transferred with cryptocurrency, although this is the first using NFT, where an actual “coin” or “token” of real estate was produced.

Like traditional cryptocurrencies such as Bitcoin, NFT is a unit of data stored on a blockchain. However, unlike most cryptocurrencies that are equally interchangeable, each NFT represents an underlying asset. According to a Forbes Advisor article “an NFT is a digital asset that represents real-world objects like art, music, in-game items and videos.”  In fact, NFT gained popularity specifically in the world of art and music.

Real estate seems to fit the NFT exchange model in the same way, since the transfer is also of a “real-world object.”

According to news reports, this was the process:

• Bidders on the property had to have cryptocurrency worth at least 650,000 in a “crypto wallet”
• Ownership of the house was transferred to a limited liability company
• Ownership of the LLC was automatically transferred to the auction winner
• Payment was immediately transferred to the seller’s digital wallet

The process was managed by Propy, a Silicon Valley company, led by CEO Natalia Karayaneva. Propy was designed to automate the real estate sales process, allowing the transfer of property to take place entirely online. Our own Aaron Davis has worked with Propy in the past, even posting a blog about his experiences.

Though it all appeared instantaneous at the moment of the bid and the transfer, the usual activities took place prior to the auction process, including prospective buyers visiting the home and reviewing the relevant paperwork. And on the title side, Propy handled the required title work on the property prior to the auction.

Handling cryptocurrency funded real estate purchases is not for the faint of heart. There are many things to consider and processes to set up to manage the out-of-the ordinary steps in the transaction.

FAN/AMD CEO Aaron Davis took a deep dive on cryptocurrency closings in 2018 when the first transaction took place in the U.S., discussing title insurance underwriting requirements, creating a crypto escrow account, a Bitcoin to USD conversion account and obtained a certification for Anti-Money Laundering/Know Your Customer (AML/KYC) in order to manage more sophisticated foreign and crypto transactions.

We’d suggest that title agents do their research now to understand what they need to put into place to facilitate these transactions for their customers. This won’t be the last cryptocurrency transaction in real estate—far from it. This is especially true in Florida, where real estate transactions with foreign investors take place every day of the week; the transactions most likely to employ cryptocurrency.

Want to brush up on blockchain and cryptocurrency? Check out Aaron’s PowerPoint Presentation (flagency.net).

The mortgage industry is also talking about eClosings and RON. Naturally, one of its leading trade publications approached our own CEO, Aaron Davis for his thoughts recently. (Subscription required)

A recent study by Notarize found that lenders can save up to $444 on per loan costs with full eClosings. Title/settlement firms can save up to $97. These are significant numbers during a time of margin compression and heightened competition.  One would expect the premise to drive lenders and title agencies alike toward full digital closing adoption (by the way, FAN has some of the nation’s most advanced RON and eClosing capabilities—and has had them for some time).

However, as Aaron pointed out, while adoption of RON and digital closings was spurred, in large part, by the daily realities of the COVID pandemic, the historic surge of refinances that came with unprecedented interest rates forced lenders to put their focus—and resources—on processing refinance volume instead of on RON or eClosing initiatives. So we still have some way to go before digital closings are the norm.

Aaron’s spoken on this issue several times before. If you have some thoughts for him, or questions, contact him now.

Our Closing Experience Technology Enhancements: Making it Safe, Secure, and Faster

While we all hoped and crossed our fingers, toes, and everything in between that we would be returning to a sense of normality in 2022, we know that you still need closing options to keep you and your clients safe.

Through this tough time, we have been able to create safe closing options and learn to bring you a more enhanced closing experience using secure technology.
We are offering a variety of ways to complete your real estate transactions while decreasing the number of in-person interactions needed to close your deal safely and securely.

Here are our enhanced closing options we have that makes closing with us your top choice:

1. Electronic EMD Delivery, without the need to bring a check in-person to one of our offices.
2. Remote Online Notarization (RON) Closings allow customers to close from anywhere they want. These closings are 100% secure and completed in less than an hour with one of our trained RON closers, ensuring you get the same closing experience you would as if you were in person. This is our preferred closing method during this time for everyone’s health and safety, and FAN is leading the charge on increasing the adoption of RON statewide. Your Account Executive can advise you on if a RON closing is an option for you!
3. Alanna.AI virtual Closing Assistant is available to you and your clients 24/7 via text message or chat feature on our website. Real estate agents can get answers anytime of the day or night. Text Alanna.AI now at 813-710-4126.
4. Faster commission checks are now available. We will wire your commission checks directly to you. With a few documents in place, this can reduce your wait time to receive a check by mail or a trip to one of our branches. Let your closers know if you’d like to receive your funds via wire on your next transaction.

From start to finish, our investment in secure, easy-to-use technology helps to reduce unnecessary trips to our office.

AMD Enterprises’ Own Aaron Davis Talks RON, eClosings in This Month’s ALTA Title News

AMD and FAN CEO Aaron Davis is a little bit bearish on RON and eClosing crossing the adoption threshold in 2022. Yet, he’s also a little bullish, too. He shared his thoughts in an article written by ALTA VP of Communications, Jeremy Yohe in the January issue of Title News. (Membership Required)

(The feature, an industry outlook for 2022 featuring a number of the industry’s most successful and thoughtful decision-makers, is well worth the read if you’re an ALTA member).

Aaron observed that more than a few REALTORS and mortgage lenders do want to see digital closings go mainstream for a number of reasons. So that alone will likely drive the percentages up this year. However, he also sees headwinds—namely, in the form the practical ability for all parties to collaborate and the politics surrounding which party (buyer or seller) is calling the shot on the title company to conduct the eClosing.

Aaron’s spoken on this issue several times before. If you have some thoughts for him, or questions, contact him now.