Just like real life, virtual real estate is in high demand. It has become just as expensive, and prices have gone up in the last year. Virtual parcels are being sold by a few metaverse projects and have fetched prices over seven figures. Considering how well real estate in the metaverse is doing, a company called Terrazero Technologies has begun to offer mortgages.
There are several companies in the blockchain arena like The Sandbox, Decentraland and others which are in the virtual real estate business. They are doing very well in selling virtual real estate as investors leverage crypto assets and investments. In November 2021, sales were in a few million dollars. This information was published by Bitcoin news. For example, eight virtual parcels were sold by Axie Infinity for a price of $1.5 million or 888 ether.
According to a report published by Metametric solutions, the sale of real estate in the metaverse is expected to reach $1 billion in 2022 alone. Based on these facts, companies like Terrazero Technologies have begun to offer mortgage loans to investors. Buyers sign loan agreements and make payments every month till the loan is paid off. The sale deed in this case is an NFT.
Terrazero does its due diligence with KYC documentation before approving loans. Borrowers have to present business plans and agree to sign a loan agreement. If the business plan is viable, Terrazero buys it on the borrower’s behalf and turns over the deed once payments have been made. Expect more players to get into this business in the near future.