Maybe Bitcoin Can’t Buy Coffee, but it Can Buy a House
Real Estate is a trillion dollar industry. Blockchain technology is the way of the future. So, why not merge the two worlds? What if we could use Blockchain technology along with cryptocurrency to revolutionize real estate? This may seem like a far-off claim, but the truth is that it is already happening. High dollar luxury homes are being purchased using Bitcoin and other cryptocurrencies as we speak. But, as we know, digital currencies are volatile and the use of it to purchase high-ticket items is relatively new. So, what do you need to know if you want to become part of the new trend?
It Is Legal
One of the first questions I always get from people who are interested in Bitcoin is, “Isn’t it illegal?” Of course, the answer is absolutely not. It is perfectly legal to purchase a home using digital currency as long as all parties are on board. The number of houses listed that accept digital currency is increasing every day. While it may be a bit of a challenge to find title companies, banks, and other associations that are willing to deal with it and have enough knowledge to do so, the transactions are perfectly legal. To add, states like Arizona and California are already introducing legislation to make Blockchain a legal form of recordkeeping, which will then enable title companies and city clerks to get on board much easier.
Watch Out for Scams
While it is completely legal to purchase items with digital currency, still buyers must be cautious. The crypto space is new and fertile ground for scams such as money laundering and bogus coins. I get calls from overseas “buyers” all of the time. They claim they have a big stake in the next big token and want to buy property in Southern California. Just last week, I had a guy try to convince me he had a billion dollar offering in DynamicCoin and wanted to buy a few Beverly Hills hotels. As it turns out, DynamicCoin had only reached a $13.2 million cap at its height. Like I said, it’s best to err on the side of caution.
You also must be able to verify that properties are legit before proceeding. Anonymity is valued in the crypto space, but if someone refuses to disclose ownership, it is a red flag. Someone else recently contacted me about selling an island and a yacht in Croatia. But because he refused to disclose the correct information, I wouldn’t proceed. My clients trust me, and I wouldn’t do anything to jeopardize that.
Always do your homework because there are scams out there. You know the old saying: If it sounds too good to be true, it probably is. While regulators are implementing additional regulations and guidelines to help reduce the ability to scam through cryptocurrency, they aren’t where they need to be just yet. Until that happens, verify all associated parties. Go the extra mile for due diligence and protect yourself.
Be Ready to Face a Few Hurdles
Until digital currency is more widely accepted in the real estate world, the transactions are not going to be quite as smooth as traditional transactions with USD. It isn’t that simple yet. For example, one of the biggest hurdles to purchase a home using cryptocurrency is verification of funds. Digital currency is designed to be anonymous (for the most part) so you can see where it might be difficult to verify a buyer’s funds. One of my clients took a picture of himself in front of a computer screen showing his virtual wallet where his funding was stored. You might have to get creative.
As I already mentioned, finding people who can get over the idea that digital money isn’t fake can be challenging. Many sellers are not ready to deal with it. Most realtors don’t have the knowledge. Title companies and banks may not have the ability (or be willing) to handle crypto transactions correctly. So you may have to go out of your way to find the right people to help protect you and your investment.
Get Some Real Crypto Experience First
Buyers need to understand the crypto market and how it works before purchasing a high ticket item such as a home. I always suggest people get involved in verified exchanges to get some practice. There are several to choose from including Coinbase, Gemini or Binance. These exchanges behave a lot like regular stock trading. You’ll be able to educate yourself and get used to how money flows in the world of digital currency before you jump into real estate or other high ticket purchases.
Digital currency is the new trend in buying and selling, and it is certainly the way of the future. But because Blockchain technology and digital currency, in general, is still in its infancy, purchasing a home or other large item isn’t quite as simple as pulling out your wallet or using your traditional bank account. I am passionate about the future of digital currency in the real estate industry, but until it is the standard, you must protect yourself.