The Metaverse is an artificial digital world where users may interact with and mimic the actual world using virtual reality and augmented reality. In addition, virtual real estate is now a part of Metaverse’s offers as it grows. Actual Real Estate is referred to as properties that consist of land or buildings and everything permanently related to the land. A legal description exists, and the property’s boundaries may be seen on a land survey.
Meanwhile, Virtual real estate has a lot in common with real estate in terms of general definitions. The legal descriptions in Decentraland and Sandbox, for example, are individual pixels (basically code) that define the “parcels.” and much like in the real world, the number of parcels available is limited. Non-fungible Tokens (NFTs) convey ownership and rights to buy, sell, or lease property on the blockchain. Although people can buy real estate on the Metaverse with a massive demand for it, the law is still deciding whether virtual land in the Metaverse qualifies as “genuine” real estate.
Lending remains to lend regardless. Some key mortgage processes may differ when underwriting for a metaverse mortgage as a lender. These include the application process, credit assessment, borrowers’ verification, Product definition, Pricing and Eligibility, transactional fees, disclosures, loan terms and conditions, closing and funding, and the secondary markets. Lenders need to review all these aspects as it pertains to the virtual real estate of the Metaverse. The greatest purchase of virtual real estate in 2021 was a single transaction from Republic Realm for $4.3 million purchased from Atari, the video game maker. Perhaps, there will be massive demand in the market Afterall. To read more, click here.
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