Bitcoin has continued to gain popularity as a simple value transfer method for any product or service imaginable. As a result, selling real estate for bitcoin has become increasingly popular across the United States and the rest of the world. For users who want to sell a home and earn bitcoin, the process is quite simple.
As soon as the seller receives an offer, a bitcoin transaction will follow the steps of an all-cash purchase. The only difference is that bitcoin eliminates the need to go through banks. Instead, the buyer transfers bitcoin to the sellers digital wallet. Devices on the network can verify transactions on the blockchain in a matter of minutes.
What is bitcoin?
Bitcoin is a currency that only exists on computers. Computers on the network can transfer funds between people without a middleman like a bank. Each time a transaction occurs, the computer writes it on a special database known as a blockchain. People recognize the blockchain as distributed, meaning any computer in the network can access its information. It is also decentralized, meaning users and mathematical algorithms control it rather than the government. Cryptocurrencies are bought and sold on cryptocurrency exchanges. These easy-to-use platforms allow consumers to participate in a growing number of peer-to-peer transactions. The benefits of using bitcoin include:
- User autonomy
- Reduced bank fees
- Low transaction fees
- The ability to conduct mobile payments and greater accessibility for the unbanked community.
The current real estate landscape
A woman named Susan Vanech decided to list her house for cryptocurrency to reach new buyers. Another home in Ponce Davis, Miami, was selling for the equivalent amount of 6.49 bitcoin. Even a two-bedroom condo was exchanged from buyer to seller for the equivalent of $275,000 in what may have been the first bitcoin-to-bitcoin real estate transaction. Selling a home for bitcoin has been a popular decision of many people to reach the market of cryptocurrency millionaires who earned their wealth with the recent increase in bitcoin prices. All across American homes are being listed for bitcoin. In Kelowna, Canada, bitcoin enthusiasts can see the same trend. Jay Johnson also listed his home for 12.25 bitcoin (a valuation of CAD 850,000) after being motivated by tech moguls like Elon Musk. Currently, these types of transactions are completely legal by the Canadian government.
Although more platforms are making selling your home in bitcoin an available feature, other sellers are still concerned about the lack of regulation in cryptocurrency and lack of understanding of how gains in bitcoin are taxed. It was previously tricky to find an insurance or escrow company that felt comfortable handling virtual currency transactions. The lack of experts has led some to have to cash out their bitcoin for their transactions. Doing so allows the buyer and seller to treat the purchase as a traditional cash transaction. That is, until now.
How to sell your home for cryptocurrency
You only need the buyer and seller to agree on exchanging bitcoin for the property. The hardest step in the process may be finding the buyer or seller in the first place. Fortunately, many real estate agencies have allowed sellers to list their homes in bitcoin. Alternatively, cryptocurrency marketplaces like Cryptoexchange.com focus specifically on bitcoin transactions and provide options to list and purchase real estate.
Users can list their homes with the corresponding price. Buyers have the opportunity to browse the platform until they land on a real estate opportunity they are interested in; then, once they inquire and agree with the seller, they begin engaging with the escrow service. The buyer will then deposit the agreed-upon funds into the escrow account. The escrow account can then guarantee the buyer is good for their funds, and the sale can proceed. From there, the buyer and seller complete any other conditions such as a home inspection. They can then submit the paperwork to the escrow service. The escrow agent will continue to support buyers and sellers in the transaction managing the opening, maintaining, and closing of a real estate transaction.
Additional considerations when selling your home
Although an escrow agency protects home buyers and sellers, consumers must also consider the impacts of volatility on their purchases. To reduce the impacts of volatility, the buyer and seller may agree on an asset price in USD or another prevailing fiat currency. At the time of the sale, the seller receives the equivalent amount of cryptocurrency. On CryptoExchange, buyers and sellers have the option to do the agreement in this format or agreeing on a set amount of bitcoin.
Additionally, buying real estate is also considered a taxable event in most regions. Therefore, enlisting the help of a cryptocurrency or tax expert may be a necessary step when selling your home.
Photo Credit: stock photo
I don’t understand bitcoin! It’s “manufactured” out of thin air, it’s invisible? You can’t hold it in your hand? Crypto currencies are a figment of someone’s imagination? Bit coin exists only on computers?
Remember the story of the Emperor’s new clothes? He was naked and everyone was agreeing with him that his wonderful new outfit was gorgeous. Then a little boy piped up, “But the Emperor has no clothes.” and suddenly everyone was embarrassed to admit that the emperor was naked, they were fools and they had been telling the Emperor lies.
What happens when someone points out, “Bitcoin has no value, it’s based on nothing.”?
Like you said. You don’t understand Bitcoin.