A Raleigh home on Zillow features a hobbit door and an NFT. But is it worth $5.5M?
A home that looks like it’s straight out of a J.R.R. Tolkien book perched on a steep wooded hill in Raleigh is up for sale on Zillow.
The potential buyer can own the four-story home, along with a digital image of the house itself that comes with the purchase.
That digital image, referred to as a non-fungible token or NFT, is why its owner is trying to sell it for $5.5 million.
The custom-designed, three-bedroom, four-bathroom home at 4308 Graham Newton Road is a sight to see, with a four-story spiral staircase, a round wooden entry door inspired by The Hobbit and a castle-like tower.
Zillow’s algorithms estimate it to be worth over $700,000.
But its real value, says owner and seller Zach Milburn, is in the included NFT image of the home — a digitally unique, verifiable and unforgeable image exclusive to the owner, based in the same technology used for cryptocurrency.
NFTs are the current big thing. For example, the online NFT marketplace OpenSea has seen over $1.8 billion in trading volume this month.
Milburn is a cryptocurrency investor, former app developer and current CEO of a real estate startup called Nomad that will create short-term rentals for remote workers around the country — so-called “digital nomads.”
He says he’s making a bet on and a statement about the new technological frontier of the internet, money and real estate.
What’s an NFT?
This particular NFT is a cryptographic image of the home created by Milburn, made with a unique encryption and a digital signature that makes it authentic and irreplaceable.
An NFT of a piece of art, music or a digital collectible can authenticate ownership. This has been traditionally impossible with pieces of fine art or digital art and music, which can be replicated or pirated.
NFTs are rooted in blockchain technology — a digital ledger that uses a network of computers to document the transfer of ownership of a digital asset and that gives the buyer proof that they are its sole owner.
One such NFT, an image of a colorful squiggly line on a white background titled “Chromie Squiggle #3784,” sold for $2.44 million this month — something that has no utility, Milburn, 30, told The News & Observer.
So, he asks, “Why can’t my house be considered a piece of art?”
In this real estate market, Milburn believes he could fetch at least $1 million for the home itself.
“If I post my house, which is essentially ... let’s just call it a piece of art for the sake of this experiment, it has a lot of utility, a lot of real world value,” said Milburn. “And if I bring an additional piece of art as an NFT, how much is the house worth versus how much is the NFT?
“You can’t really tell me that it’s more ridiculous than the regular NFT market, because it actually comes with the house.”
The ‘Treetop Retreat’ home
Milburn said he intended the home, which he designed, to push the limits of what kind of homes can be built and what they can look like.
Part of the home’s purpose, besides being a place to live, was to be used as an Airbnb location, where it is advertised as “Treetop Retreat at Dutchman’s Branch.” Milburn is a “superhost” on the short-term rental site, and the home is rated with five stars. Stays start at $107 a night.
The home sits on 4 acres of land, is surrounded by tall hardwood trees, and includes 5,300 square feet of indoor space and over 2,000 square feet of an outdoor deck and balcony space.
Milburn says he didn’t actually think Zillow would approve the “NFT hobbit castle” but Realtors have flooded his phone since he listed it on Aug. 16. As of Thursday, he had yet to receive any offers.
“I think the ($5.5 million) price is obviously high. But again, you take contemporary art where a squiggly line on a piece of paper (could sell) for $70 million, right? ... If there are art collectors, or people who are have gotten really successful in the crypto space, a lot of times they want to invest back in the space, and these sales get huge stories, like a $70 million NFT sale.”
It’s worth a shot, he said, and at worst, there will be exposure for the future of NFTs and real estate. Forbes says NFTs offer a possibility for tokenizing real estate assets and removing slow paperwork from banks.
Milburn proposes that an NFT with a home could work in place of title insurance by protecting lenders and homebuyers from losses due to defects in a property’s title.
“I’m kind of just making a statement, you know, about the insanity of it. But at the same time, I’m very excited about it. Nothing’s off the table right now in terms of what can happen.”
This story was originally published August 27, 2021 at 5:45 AM.
