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In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic. Anthony is the broker-owner of South Florida’s largest RE/MAX office, and a working agent who sells more than 100 homes each year.
This month’s situation: A veteran agent is developing a side interest in cryptocurrency that is bleeding into her real estate business. Should her broker keep her focused on their primary business?
Agent perspective
With low inventory levels and volatile trends shaking up our real estate market, I (like many of my agent colleagues) have had to consider other revenue streams to support my family. After doing my research and holding conversations with people I respect, I am very enthusiastic about cryptocurrency as both an investment opportunity and a platform for facilitating real estate transactions.
Crypto has come a long way in recent years, and people a lot smarter and richer than me have staked enormous amounts of money in seeing it become mainstream.
After investing personally and with friends, and using Bitcoin to close a few deals, I have been aggressively branding myself as a “crypto-friendly” agent on social media and listing ads. I believe customers want to work with agents who are thinking and working ahead of the curve, and it has led to some improved engagement.
Whether you like crypto or not, the future is here and it is already a factor in real estate. I see no issue with connecting my growing expertise in this new form of alternative financing with my established real estate business, but my broker disagrees.
His arguments seem stuck in the past, and he needs to keep up with the times if we want to stay competitive. Our title company is already adapting to this change, why shouldn’t we embrace it?
Broker perspective
While cryptocurrency may seem to be quickly becoming a mainstream part of the economy, I believe there are still some potentially serious questions about its viability. Just as we have to be careful in advising consumers regarding the potential returns on investments for residential and commercial properties, there is considerable risk in stepping out of our role as Realtors in advising consumers regarding the use of crypto.
The majority of people still connect the home buying and selling process with rock-solid, tried and true practices and, frankly, crypto appears to be the opposite of this approach.
When agents brand themselves as crypto “experts” or “specialists” on their social media accounts, I cringe. What qualifications do they have to advise someone of the risks and benefits of using this new, unregulated and volatile exchange?
There is so much to consider — tax ramifications, unpredictable price changes and the risk of failed transactions due to that instability, just to name a few. In the same way that I advise our Realtors to not be the agent and the loan officer/attorney/appraiser/inspector, etc., I feel strongly that they should only wear one hat in this respect.
Agents may present themselves as real estate professionals or crypto advisers, but not both. With its extreme volatility, there is simply too much risk of a crypto-based transaction failing, leading to buyers, sellers and other agents pointing fingers at the “enthusiast” who recommended it.
By the way, our title company’s way of accepting this new form of alternative financing is to make all crypto home buyers immediately re-sell their homes on the exchange and convert to cash right away — hardly a ringing endorsement, and more like an “arm’s length” position.
How to resolve
As with everything that touches real estate, it is important that agents be completely informed so they can effectively assist clients to accomplish their goals. Crypto has evolved to the point of becoming a fairly secure and speedy way to complete a transaction, especially for international clients who face unusual and complicated obstacles.
Given its novelty, however, both buyer and seller in any given transaction must be in full agreement as to its use, and all parties must understand the potential risks and requirements.
The broker should keep an open mind about alternative forms of financing and their impact on real estate in the coming years and have no issue with an agent who wants to stay personally involved in crypto as a side interest. On the other hand, the agent should only offer their clients pure real estate-based advice — full stop. (The National Association of Realtors’ Code of Ethics clearly dictates that agents do not represent consumers outside of their area of expertise.)
Anthony Askowitz is the broker-owner of RE/MAX Advance Realty, with offices in Hollywood Beach, Davie, Miramar, North Miami, South Miami, Kendall and the Florida Keys, where he leads the activities of more than 190 agents. Follow Anthony on Instagram.
NOTE: Anthony Askowitz is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.
