Buying real estate with cryptocurrency is becoming increasingly popular, as more and more real estate companies and property owners start to accept cryptocurrency as a form of payment.
Before we get into how to buy real estate using crypto, let's first start with defining what cryptocurrency is.
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.
Cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactions and to control the creation of new units. All verified transactions and records are maintained by a decentralized system and therefore, it's almost impossible to double spend or counterfeit.
Many cryptocurrencies are supported by blockchain technology, a distributed ledger that maintains records of transactions that have been made as well as keeps track of ownership of the cryptocurrencies. The records cannot be tampered with.
A unique feature of crypto is that it's not issued by any central government. Cryptocurrencies are usually generated through a process known as mining. The process involves downloading software that contains a partial or full history of transactions that have occurred in its network. Due to this, cryptocurrencies are not subject to government manipulation or interference.
YES. You can!
Whether you're looking to acquire your own home, a rental property or a vacation spot, it is very possible to buy and sell real estate using cryptocurrency. The digital currency continues to grow in popularity among buyers, sellers, real estate companies and investors.
Similar to how you pay money and receive a good or service, crypto can be used in the same exact way. It is estimated today that more than a third of small businesses accept crypto payments. However, it is important to note that not all merchants in business accept crypto as a valid mode of payment.
The real estate industry is slowly but surely catching up to this trend. The use of fintech platforms like Coinbase and Bitpay have eased the process of transferring crypto peer-to-peer and even between consumers and businesses. In fact, some mortgage lenders have begun experimenting with crypto. They have given consumers the option of using crypto as a mode of payment.
In August 2021, United Wholesale Mortgage, the nation’s second-largest mortgage lender began piloting crypto payments but scrapped the program shortly after citing high operational costs and regulatory uncertainty in the crypto space.
There are many types of cryptocurrencies but Bitcoin is by far the most commonly used. It is reported that Bitcoin is used in approximately 330,000 transactions daily. Mind you, this number is on the rise as more merchants embrace the use of the digital currency.
Step 1: Start by identifying a seller with real estate property that you're interested in purchasing, who accepts crypto as a form of payment.
Step 2: Identify a real estate agent or company that has experience in handling Bitcoin, when it comes to buying and selling real estate properties.
Step 3: Next, you will need to exchange your real money for an equivalent amount of Bitcoins online. You will need to have a digital wallet which you can fund using your credit card or through a mainstream Bitcoin broker.
Step 4: After that, you'll also need to find title insurance and escrow companies that handle cryptocurrency transactions.
Throughout this process, be sure to work with a real estate agent who has handled cryptocurrency transactions in the past as this is a new territory for some.
Great thing is that the real estate business is becoming more accepting of Bitcoin transactions. This is a real game changer in the real estate industry.
Bitcoin is considered as the most stable coin by market analysts. Over the years, Bitcoin has grown in popularity and today, it is considered as the most popular cryptocurrency in the market. Its value grew from $0.003 in 2010 to approximately $71,400 with a market cap of approximately $1.4 trillion as of March 2024.
Yes they are.
As a peer-to-peer electronic monetary system without a central regulatory body, Bitcoin has been widely accepted by merchants worldwide. Bitcoin in many states is considered as a digital property or commodity. This therefore means that when your property is sold through a Bitcoin real estate transaction, you have to pay capital gains tax.
Therefore, it is important to consult with your financial advisor before you make a real estate investment with Bitcoin or any other cryptocurrency.
When looking to buy real estate property, you need to find out if the seller accepts Bitcoin. If they don't, you must convert your crypto into traditional currency using a third-party broker exchange and then make payment that way.
When purchasing a property using Bitcoin, it's important to note that mortgage lenders may not accept Bitcoin as a form of down payment. Instead, buyers may opt to pay the seller using a combination of cash and Bitcoin. The remaining amount needed for the purchase can then be obtained through a mortgage that typically requires a cash down payment.
Once you're done with the property negotiations, find out the payment method that you will use when paying your real estate agent's fees. This is because the realtor might prefer being paid in cash or maybe through Bitcoin. Just find out to avoid any inconvenience.
People purchase real estate using crypto for a variety of reasons. Here's why you should consider purchasing real estate using Bitcoin, Ethereum or any other type of cryptocurrency.
Diversification of investments - If you want to diversify your investment portfolio, purchasing real estate using crypto is a good and stable way to go about it.
Discounted prices for cryptocurrency payments - As compared to sellers who only accept cash, those that accept crypto as a form of payment are more likely to give you a discount on your real estate purchase especially if they are particularly bullish on crypto.
Time efficient - Use of smart contracts and the absence of middlemen when making real estate transactions makes the processing of transactions much faster.
The real estate landscape is gradually changing to accommodate cryptocurrency transactions. It is therefore very important that buyers, sellers and real estate agents become familiar with the process of handling cryptocurrency transactions.
If you are looking for an experienced real estate agent to help you with your next real estate transaction, you're in the right place. Get in touch with us today and we'll help you find the property of your dreams!
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https://bitpay.com/blog/buy-a-house-with-cryptocurrency/
https://www.pacaso.com/blog/buy-home-with-cryptocurrency
https://migronis.com/blog/how-to-buy-real-estate-with-cryptocurrency
https://www.coindesk.com/learn/how-to-buy-a-house-with-crypto-us-edition/
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