Purchasing a Home with Cryptocurrency?
Disclaimer: I did not get paid to promote any of these aforementioned services. The following comes from experience doing crypto deals.
The last few months have been flooded with news articles related to Bitcoin and other crypto currencies. I would venture to say most people do not understand the fundamentals of the blockchain and how cryptocurrencies operate, however for the purpose of this post I will merely elucidate how to purchase a home with these 1’s and 0’s on the distributed ledger.
To my dismay, one of my clients approached me saying he wanted to purchase his Uptown Manhattan coop with Bitcoin and told me to figure it out. My hunch is that most agents would’ve told him to go kick rocks and moved on, however I only (temporarily) discontinue helping clients when we’ve tried every which way to get them into a home. I knew in this instance that there was a lot of road left-and I intended on walking it.
The first hurdle was finding a way to transfer large sums of Bitcoin to USD since the seller will most likely not want the volatile currency. A cryptocurrency exchange such as Coinbase, Kraken, Coinsquare, or Gemini would’ve done the trick but they’re typically slow, do not exchange large amounts of Bitcoin (upwards of $1,000,000) and take a large percentage of the transaction.
After ample research, I stumbled upon a service called Bitpay, a business-to-business (B2B) service that makes the exchange in 1 business day, can exchange any amount of Bitcoin necessary to facilitate a transaction and takes only a 1% fee for their services. Even though Bitpay is designed to be B2B, real estate transactions fall under those parameters.
So after hundreds of hours on the phone with various entities, we found an apartment he loves at a good, fair price, he signed the contract, used Bitpay to transfer the 10% earnest money deposit to his attorney’s escrow account, and the seller’s attorney received USD. Now we wait for the closing!
Written by Evan Paliotta
It sounds simple but it was not easy. If you’d like me to delve deeper into the intricacies of these transactions, feel free to reach out on my email (Evan@BizzarroAgency.com) or give me a call at (845)548-4278.