Can You Use Crypto in Real Estate Transactions?
Here’s what you need to know about cryptocurrency and real estate.
Can you buy or sell a home with cryptocurrency? It’s a hot topic right now, and you’re only going to hear more about it in the future. That’s why today, I want to talk about crypto and real estate.
To start, we don’t even know if crypto can truly be defined as currency. The FEC and SEC are in a fight right now to determine who gets to regulate crypto, so there’s a lot of uncertainty in the air. Knowing this, it may surprise you to learn that yes, you can buy and sell real estate using crypto. Not only that, but if you have an agent who understands the process, you can be protected on either side of the transaction.
To understand how crypto works with real estate, we need to go over how normal fiat currencies work. When you purchase real estate with fiat currency, such as the United States Dollar or the Euro, you put money into an escrow account to hold the property. This is an important step in any real estate transaction, so you need to find a title company that is willing to hold escrow in both crypto and fiat.
We’ve found a title company in California that is willing to hold escrow in both crypto and fiat, and they’re called Guaranteed Title. Using another company called BitPay, we can convert fiat into crypto and vice versa.
One of the biggest questions with crypto is that it’s volatile. What if the crypto you put in escrow is worth $70,000 when the transaction starts, but it’s down to $60,000 when it’s time to close? This volatility will decrease as the market cap increases, but in the meantime, the onus is on the buyer to bring enough crypto to the table to equal the agreed-upon fiat amount. So if you both agreed to a price of $100,000 and your crypto value decreased, the buyer needs to add more money to make the two amounts equal.
As the seller, you don’t face very much risk, and this type of transaction will only become more common in the future. It’s a complicated topic, so if you have any questions, please call or email me. I am always willing to help!