With buying real estate with cryptocurrency being the talk of the town, the question comes to what actually can I buy with it. The answer to that is it depends. Usually, homes in the US are brought in US Dollars.
Few online sites and few local shops are accepting it as a payment form. Buying real estate with cryptocurrency is still a challenging task as it requires the involvement of various parties. There are very few chances that any of them uses cryptocurrency to buy real estate. This article explores the possibility of buying real estate with cryptocurrency.
Are you interested to become the most demanded real estate agent in Illinois? Visit our webpage now to get enroll in Illinois license courses or renew your license.
HOW CAN ONE BUY REAL ESTATE WITH CRYPTOCURRENCY?
If the transaction is an all-cash deal, where there is zero financing involved, then the chances of buying real estate with cryptocurrency are pretty good. Of course, the seller needs to be willing to accept cryptocurrency in exchange for selling out their home. The tricky part becomes how to conduct the transaction.
Most banks are not using cryptocurrency. It evidently causes a few challenges when it comes to buying/selling a home using cryptocurrency.
Often (if not all) local governments do not accept cryptocurrency as taxes or fees payment. If I buy a home with a mortgage, then I’ll generally use US dollars to clear the monthly mortgage. Most title companies that prepare the new deed and closing paperwork also do not accept cryptocurrency in any form. Therefore, they will convert the cryptocurrency into dollars and then transfer it to the title company.
Ready To Learn More? Connect with our Illinois real estate classes and make an incredible difference in the real estate world.
THE CONS OF BUYING REAL ESTATE CRYPTOCURRENCY
Currently, cryptocurrencies are very volatile when compared to US Dollars. It can take a real estate transaction thirty or more days to close considering the need for inspections, appraisals, and more. During that time the price of any cryptocurrency fluctuates a little bit. If the house cost is in terms of the cryptocurrency (for instance 6 bitcoins) then the actual dollar value will differ once the sale closes and the risk goes to the seller. If the price is set in dollars, then the buyer has to pay the equal cryptocurrency upon closing. The risk then shifts towards the buyer.
Since most title companies will not take cryptocurrencies for the transaction there can come the issue of who does what first. Does the buyer transfer the cryptocurrency first and then the seller signs over the deed to the buyer or vice versa? Once the title companies complete the cryptocurrency transaction, it does not revert back like traditional money. Until they use an escrow-like service for cryptocurrency real estate transactions, there is the risk of the transaction turning bad. The reason is, the seller used the deed instead of cryptocurrency. Probably, the seller took the money and ran without transferring the deed.
We need to focus on a bundle of factors. So, cryptocurrency can become an easy transaction for buying and selling real estate.
BOTTOM LINE
Houses and other types of real estate can be bought with cryptocurrency if both parties get to agree. Dollars will be an essential part to be brought to the closing table to pay for taxes, title fees, and more. If the Federal Reserve implements their own cryptocurrency everything can change immediately and the buying and selling of real estate with cryptocurrency will become an everyday occurrence.
If all of this sounds exciting to you, you’re probably ready to pursue a career as a real estate agent! Our team at Illinois Brokers Academy is here to help you with our real estate courses for any real estate career you want.