Bitcoin real estate transactions are set to increase across the U.S., and Florida was one of the first major examples of this trend. In December 2017, a bitcoin enthusiast sold their house for bitcoin in Miami through a successful cryptocurrency real estate transaction. This year and beyond, we expect more homes to be sold with a direct bitcoin and cryptocurrency real estate closing that meets the expectations of both property buyers and sellers.
What Is Bitcoin?
Bitcoin is the most popular cryptocurrency, and it’s been in existence for over eight years. It has grown in popularity and its value has risen from $1 to its current price of over $10,000 in February 2018.
Bitcoin is a peer-to-peer electronic cash system without a central regulatory body. Due to its wide acceptance, many states have crafted legislation for tax purposes and have referred to it as digital property or a commodity. This means you’ll need to pay capital gains tax when your property is sold through a bitcoin real estate transaction.
All bitcoin transactions are anonymous and encrypted. To start making real estate transactions with bitcoin, you need to have a digital wallet. You can typically fund it with PayPal or with your credit card through a mainstream bitcoin broker. However, some banks and credit companies have begun banning their users from making transactions using cryptocurrencies like Bitcoin. There is much speculation as to why this may be happening, including possible concerns from banks about liability and disruption in their industry. Before choosing to fund your real estate transaction using cryptocurrency, be sure to check with your financial institutions to ensure all transactions will go smoothly.
How Are Bitcoin and Other Types of Cryptocurrency Used in Real Estate?
Bitcoin and other popular cryptocurrencies like Ethereum are beginning to be used for real estate transactions. Some states in the U.S. are also in the process of changing their laws to allow them to be used for financing real estate transactions. From rent to services to deals, the industry is exploring various ways to use bitcoin.
Property buyers are now paying with bitcoin while sellers have the option to accept bitcoin directly or have them converted into cash. The power, openness, and security of the blockchain is being explored by stakeholders in the industry as a viable option for recording property titles and transfers during the sales process.
Is Bitcoin Commonly Used for Real Estate Transactions?
The use of bitcoin is attracting more attention, and more sellers are now willing to accept it in place of cash, particularly those who are bitcoin investors. However, the use of bitcoin by title companies is still very uncommon. In fact, not many title agencies have the experience and understanding of how cryptocurrencies work. Therefore, they’re not always able to handle the intricacy involved in a deal that’s paid for in using bitcoin.
What Companies Are Supporting It?
In September 2017, the Knox Group of Companies based in the Isle of Man announced it will accept bitcoin as payment for commercial and residential property in Dubai. The property has twin residential towers and one shopping mall. In December 2017, an agent working for Intero Real Estate posted a flyer on Facebook saying that all sellers on its listing will accept bitcoin.
Today, more than 100,000 merchants worldwide accept this digital currency as a form of payment for products and services, including well-known companies like Virgin Airlines, Microsoft and WordPress. NASDAQ has also announced plans to allow bitcoin futures to be traded on its electronic exchange.
Title Partner of South Florida: Your Bitcoin Real Estate Closing Expert
Bitcoin and cryptocurrencies like Ethereum will continue to show promise in the real estate industry. Purchasing real estate with cryptocurrency has the potential to reduce the time required to close a deal. Most sellers will prefer buyers who can provide secure funds within a short period of time. Also, cryptocurrencies like Ethereum allow for smart contracts, and they also permit the buyer and seller to include various details that’ll improve the security of the transaction.
Title Partners of South Florida offers a unique service for cryptocurrency real estate transactions. Our team is pioneering the handling of real estate transactions involving cryptocurrencies, and we have successfully closed deals involving bitcoin. Unlike other agencies with minimal experience with cryptocurrencies, we have the expertise necessary in helping you navigate the bitcoin real estate closing experience successfully.
Contact Title Partners Today
For more information on best practices for using bitcoin in real estate transactions, contact us today. If you’re interested in partnering with us for title insurance or closing needs, visit our site to get a quote or give us a call at 954-566-6000.