Can You Buy Real Estate With Bitcoin?
With bitcoin and other cryptocurrencies gaining in popularity, many people are now wondering whether they can use them to buy homes. After all, they’re supposed to be a medium of exchange. That is something that you can swap for the things that you actually want.
The answer is “yes,” you can buy real estate with bitcoin. However, you’ll need to have the seller’s agreement. Like many businesses, they might not accept crypto directly. They might not even know what it means. And they may wonder whether it is worth taking the risk.
If you do go ahead with a bitcoin purchase, you’ll likely pay more than that dollar-equivalent price. That is, you will probably get a better deal if you sell your bitcoin for dollars.
With that said, there are some advantages to bitcoin purchases.
Advantages of buying a house with bitcoin
When you buy a house with bitcoin, the biggest benefit is the fact that you reduce risk. You’re exchanging a highly volatile asset for a less volatile one.
This exchange can be helpful for people who are worried that they are holding too much bitcoin.
You may also benefit from faster purchase speed. When you bring bitcoin to the negotiating table, it is like being a cash buyer. You don’t have to go through the hassle of applying for a mortgage. You can simply pay for the home as though you were buying it in a shop. Yes, there are still some transaction fees you’ll need to pay. But usually, you can get things wrapped up quickly.
The Downsides Of Buying Real Estate With Bitcoin
The most challenging aspect of buying real estate with bitcoin is finding a seller. It can be notoriously difficult. Most will be unwilling to accept crypto because they still believe in fiat money.
Insurance and escrow services may also be lacking. You may find it hard to find anyone willing to act as an intermediary.
There may also be challenges in tracing the origin of the money. Sellers usually want to know that the buyer is using legitimate funds. However, traceability is harder with bitcoin. It exists outside of the traditional banking system. Therefore, sellers may be less willing to accept such payments.
Many people in real estate are unfamiliar with terms such as initial coin offering or “crypto exchange.” They don’t understand what they mean or how they operate. Furthermore, this applies to the supporting industry. There are many ancillary firms, such as lawyers and estate agents who only work in dollars and cents. They’ve never heard of anyone using crypto to buy a house. They don’t like the idea.
Lastly, buyers have to contend with the volatile nature of bitcoin. One week you may be able to afford the property you want, but not the next. In that sense, the purchase date matters a great deal. You want to lock things up quickly, just in case the value of bitcoin drops.
Of course, the same can happen in reverse. The value of your crypto could rise, letting you purchase a better property.