Coin for Property: Bitcoin Payments in Real Estate Becoming More Popular
Real estate is one business sector that is ready and willing to embrace bitcoin for buying and selling property. The transaction sizes and trade volumes in the property business are huge — which is a major reason why the dynamic may be on the rise.
Crypto Price Boost Presents Opportunities for New Millionaires
Cryptocurrency has become one of the most profitable assets to hold in recent times. Last year, the bitcoin price increased by 1,800 percent, resulting in many becoming crypto millionaires. That has produced an amazing opportunity for those selling both premium and regular real estate, and many have jumped on the bandwagon.
So far we’ve seen luxury properties for sale in Spain and Dubai, as well as ordinary homes in Seattle, Oakland, and Melbourne. It seems bitcoin payments in real estate are starting to be in vogue.
Since bitcoin started regaining value and popularity in 2016, there have been several instances where properties have been sold for BTC. If it continues to grow steadily, the real estate business will witness more properties being advertised and sold for BTC and even other digital assets, like bitcoin cash (BCH), litecoin (LTC), or ether (ETH). It is also usual to see property owners marking bitcoin as the primary payment option — and in some cases the only option.
The reason cryptocurrencies are a good fit for the property business is that they allow transacting in larger amounts with lower fees. Additionally, it also removes the need for a middleman to sign the deal.
Coin Center is a cryptocurrency based non-profit research and advocacy think tank. Neeraj Agrawal, director of communication at Coin Center, said paying for property in cryptocurrencies is easier than you’d think:
“Within the context of real estate, it makes sense to use cryptocurrency in those types of transactions. Cryptocurrency is a way to send large amounts of money pretty easily with relatively low fees and little interference from middlemen.”
Price Volatility Remains an Obstacle
However, there are a few hurdles to jump. Perhaps the most major problem while dealing with digital currencies is the volatility factor — the wild swings can earn huge profits, but also result in heavy losses. Property owners and brokers who accept cryptos for selling homes usually update prices in a local currency on a day-to-day basis.
However, price fluctuations are not stopping property brokerage firms from accepting cryptocurrencies. According to Mercury News, Bitcoin Real Estate, a Bitcoin real estate listing company, revealed that it has more than 400 homes listed on its website that accept cryptocurrencies as payment.
More Buyers Want In
Newly-minted bitcoin millionaires, who before could not afford to buy property, are eager to use their valuable bitcoins to purchase physical assets.
Accepting bitcoin as payment on property listing websites attracts more attention, and thus buyers, than usual. One example was when Alex Bartilotti put his property for sale in Portugal for $1.2 million USD but did not receive any offers. But as soon as Bartilotti advertised he’d accept bitcoin (100 BTC to be precise) for the property, he received six offers.
Recently, Canter Companies, a San Diego-based real estate brokerage firm, affirmed that it would accept bitcoin as payment for the two multimillion-dollar homes it is brokering. The homes are priced at $19.8 million, which equates to 1,750 BTC.
CEO Andrew Canter said:
“We realized there is so much new wealth in the crypto space. There are a lot of new buyers and a lot of people that have seen their wealth fluctuate over the last year.”
To cut sellers’ risk while accepting bitcoin as a payment option, Canter will employ an investment bank that will draft a futures contract, which would fix BTC at a specific price under the contract. If these new models and techniques are successful, then we can expect the marriage of bitcoin with lavish properties to keep booming in the months ahead.
Would you pay for a house in crypto? Let us know your views in the comments section below.
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