Real estate agents today are seeing myriad changes to the industry, so it should come as no surprise that Bitcoin, a worldwide cryptocurrency and digital payment system, would get into the mix.
According to a CNBC report, Bitcoin is slowly making its way into closings on everything from Lake Tahoe land in California to Manhattan condos to single-family homes in the heart of Texas. Ben Shaoul, president of Magnum Real Estate Group, noted that buyers today have evolved and they include young people who want to pay with various forms of payment.
“Cryptocurrency is something that has been asked of us — ‘Can you take cryptocurrency? Can we pay that way?’ — and of course when somebody wants to pay you with a different form of payment, you’re going to try to work with them and give them what they want, especially in a very busy real estate market.”
Shaoul pointed out that there is currently a lot of inventory in the market. As a result, having an edge over his competitors vital. He is hoping that Bitcoin will be that edge, particularly with millennial buyers.
“I think the demographic of the crypto user is a younger millennial, but, that being said, you have a lot of people come over from other countries, who are buyers from different places, who like to trade in different types of currency. Not everyone wants to trade in dollars or yen or euros.”
According to the report, the first ever single-family home sale in Texas involving bitcoin was announced in September. The buyer, who works in the tech industry, purchased the newly built home in Austin using bitcoin, but the seller, a custom homebuilder, wanted the currency converted to dollars during the transaction. J Kuper at Sotheby’s International Realty, which brokered the deal, said the method is drawing interest.
“Austin is a really technologically advanced city, I’d say, so I was surprised we hadn’t heard anybody wanting to do this before. But, candidly, we didn’t know how to do it. It was a quick challenge and scramble to figure out all the moving parts, but we were instantly excited about the opportunity to figure that out.”
They used BitPay, a global bitcoin payment service provider headquartered in Atlanta. It converted the bitcoins into dollars for the buyer. Since the bitcoin value chances daily, the risk was all on the buyer side. The seller agreed to a fixed price in dollars.
The complicated nature of real estate may be why bitcoin has been slow to move into the market. One of the first deals in the U.S. involved a $1.6 million sale of land — a home site — in Lake Tahoe in 2014. Martis Camp Realty President Brian Hull, who brokered that deal, said his firm has not received any other inquiries from buyers interested in using bitcoin.
However, the U.S. real estate market has been slower to buy into bitcoin for real estate. All of the deals so far have been done without a mortgage, and Shaoul said the bulk of those inquiring about his Manhattan condos are foreign buyers.
“This industry of real estate is notorious for lagging behind in technology, and innovation. Now we are starting to innovate, so we’re very far behind. Bitcoin and payments with bitcoin have been around for years. Why it hasn’t touched down in real estate in the sale of an apartment is odd, quite frankly.”
