Not long ago, the real estate industry had nothing to do with blockchain or cryptocurrencies. Both are now considered important footholds for the market. Distributed ledger technology takes transparency, accelerates the contract process, and takes traditional Multiple List Services (MLS) databases to a whole new level.
Despite its obvious value, real estate cryptocurrencies are still in their infancy. Together, let’s take a look at the current situation, how the industry can benefit, and what challenges need to be addressed.
How does it work?
The first recorded real estate transaction was a single-family home in Austin, Texas. The purchase was made in 2017 and started by Kuper Sotheby (International Real Estate), Bitcoin Payment service provider.
Buyer’s agent, Kuper Sotheby’s Sheryl Lowe, was completely pleased with how everything was done. In a press release, she said she hadn’t traded so smoothly in all of her 33 years of real estate experience. “In just 10 minutes, Bitcoin was converted to US dollars and the transaction was completed.”
Bitcoin transactions did not require bank processing and verification, so we did not have to wait a few business days. However, sellers and buyers had to accept the risk of fluctuations in the value of Bitcoin. The final amount in dollars basically depended on the congestion of the network at that time.
Selling real estate at BTC is not much different from other sales. Still, both parties must sign the contract. The only difference is the payment method. Kuper Sotheby also said that these transactions are irreversible and that anyone who participates in the sale of Bitcoin must fully trust the other party.
So far, you can’t get a mortgage in a house with cryptocurrencies. Some people expect to have an open source mortgage loan contract built on Ethereum rather than a traditional contract. Smart contracts are self-contained, so no additional parties are needed.
Benefits of buying a home with cryptocurrencies
The benefits of buying a home with Bitcoin or another cryptocurrency are:
Tamper-proof, transparent acquisition
Everything recorded on the blockchain is immutable, tamper-proof and democratic. This fact cannot be denied or changed if there is a block indicating that the property was purchased. Anti-corruption and anti-fraud campaigners are defending blockchain for exactly this reason.
In addition, all transactions can be viewed transparently using a personal node or using the blockchain explorer.
Increased purchase speed
In the best scenario, cryptocurrency purchases can be processed within an hour. Even the big banks can’t compete with this level of efficiency.
Buying a house with cryptocurrencies is like buying with cash. Of course, you need enough cryptocurrency to buy a house in advance.
Potential discount
Many sellers expect the value of cryptocurrencies to increase over time and are willing to offer discounts. If not, who will accept the crypto if they are not confident in the future price direction? Ask around to see sellers who accept slightly lower prices for homes in exchange for promising cryptocurrencies.
Disadvantages of buying a house with cryptocurrencies
Remember the disadvantages as important as the advantages.
Cryptographic volatility
Much can change during the home purchase timeline. If you agree with the X amount of cryptocurrency, the exchange rates may vary significantly by the end of the negotiations. Profitable transactions can quickly become disastrous.
Unfamiliar with digital currencies
Despite numerous news articles, guides, and tutorials, many people still don’t know how to avoid cryptocurrencies. Cryptographic transactions may be too complex to be familiar to the general public-this applies not only to buyers, but also to realtors and sellers.
Find a seller
The Bitcoin-friendly market sector is very small. Therefore, it takes some time and effort to find a seller who accepts digital currencies on traditional home listing sites. It’s a feature that isn’t popular on major sites, but you may be lucky to find a website with a cryptocurrency filter. A proper online survey will help!
Cryptocurrency and real estate overview
The conversation about cryptocurrency applications has become hot. It’s very unpredictable and unstable, but many believe it’s the future. Digital currencies have already entered the real estate industry, offering new opportunities for promoters, investors, individual buyers, sellers and borrowers.
Still, anyone considering buying cryptocurrencies should be careful and consider the risks. And when it’s as substantive as a house, counter all the uncertainties involved.
