Bitcoin has been front and center in the headlines over the past week. It’s a cryptocurrency that exists purely in digital form and has been steadily gaining popularity since its inception in 2009.
With the launch of bitcoin futures by major exchanges in the coming weeks and months, we can expect the fervor to continue.
What does this mean for the real estate industry?
Buying and selling homes through bitcoin has become a bit more commonplace overseas, and it’s now also starting to gain traction in the U.S.
Having sold a home earlier this month in bitcoin, and now working with a developer on a condo development to be offered through bitcoin, I’ve put together a list of five things every agent and broker needs to know about selling a house with bitcoin.
Bitcoin’s value continues to hit record highs
After rocketing above $19,000 for the first time, it’s now leveled off around $15,000.
This buzz is likely to draw new investors to the cryptocurrency, and it’s critical that real estate buyers and sellers transacting in bitcoin have an understanding of the technology, beyond just the flashy headlines, especially given its extreme volatility.
Here’s a good starting point.
Bitcoin exists outside of traditional financial markets
This is one of the currency’s biggest draws for investors who want to avoid the volatility of euros, dollars and yen, especially in today’s tense global climate.
For this reason, real estate professionals can expect to see increased interest in bitcoin among their international clientele.
The heaviest user demographic of bitcoin is European males between the ages of 25-34
Bitcoin is still very much in its infancy, and not every buyer is ready to do business in the cryptocurrency.
The U.S. market especially has been slower to adopt bitcoin for real estate, so brokers and agents here must take that learning curve into account.
Flexible partners are a must
Agents must find fluid partners, title companies for example, who are comfortable working with bitcoin.
Because the currency is so new and its value changes every day, there are payment service providers who will convert bitcoins into dollars to mitigate the risk for wary buyers.
In the U.S., the bulk of real estate bitcoin deals have been done without a mortgage and are foreign buyers
Bitcoin has garnered more traction abroad than in the U.S., and most of those are cash buyers.
For bitcoin sellers, it’s critical to invest marketing dollars in reaching overseas buyers as awareness grows domestically. In the same vein, partnering with an international real estate company is paramount.
Although the future of bitcoin may be difficult to predict, it has certainly ushered in a new way of transacting real estate, and it’s indicative of the sea change our industry is experiencing as technology plays an increasingly important role in the way our clients buy and sell homes.
Paul Benson is the managing partner and global real estate adviser at Engel & Völkers Park City. Follow him on Twitter, or connect with him on LinkedIn.
