3 bright cases of selling real estate for Bitcoin

How to use bitcoin for buying or selling home 

 

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Bitcoin has created a new type of wealth, especially for those who bought bitcoin at the lowest price. Bitcoin is used in over 270,000 transactions daily, and its use is only increasing. 
So, why not use bitcoin to make real estate transactions? We will tell you more about the most profitable trades related to purchasing and selling real estate using cryptocurrency. 

The list of real estate agents that use bitcoin 

If you are planning to use bitcoin to make real estate transactions, you should be aware of real estate agents and companies that have experience using bitcoin when selling or buying a house: 
Magnum Real Estate Group is a New York-based real estate organization adapted to the desire of the younger generation to make business transactions possible using bitcoin. 

  • Kuper Sotheby's International Realty – such Texan real estate company was the first in Texas to complete a real estate transaction using bitcoin. 
  • Sand Key Realty is a Florida-based real estate company with a history of listing real estate, with the seller accepting bitcoin as a form of payment. 
  • Open Listings – sites like Open Listings make it easy to buy homes using bitcoin, with the ability to restrict search results to homes that sell for bitcoin. 

The future of real estate is changing to adapt to the use of bitcoin in real estate transactions, and more real estate companies are facilitating bitcoin transactions. 

The cases of buying and selling real estate for Bitcoin 

You can buy and sell a house with Bitcoin and other digital assets. Such assets can be used in many paths, such as transacting bitcoin directly with a merchant, qualifying for a mortgage, or a customer can convert their digital money into cash. On the ICOholder platform, you can get all the data about the current bitcoin rate and other digital assets. 

Transfer bitcoins with a private seller 

If you want to buy a house by simply transferring bitcoins, you first need to find a seller willing to accept bitcoins as payment. Talk to the seller about the terms of the exchange so that there are no problems in the future. Because bitcoin transfers do not have a paper trail, you must contact a professional lawyer to ensure that proper paperwork and purchase documentation is created. 

Use bitcoin holdings to claim a mortgage 

The real estate market may be tricky, and the process of getting a mortgage loan can sometimes be confusing. For any significant change to occur, the involvement of primary mortgage lenders such as Freddie Mac is required. 
The good news for bitcoin holders is that Freddie Mac has clarified its stance on using bitcoin in the mortgage loan qualification process. They indicated that you could use bitcoin to secure a mortgage under certain circumstances. Check out their latest newsletter for information on using bitcoin to get a mortgage. 
Other mortgage lenders allow people to use their bitcoin holdings as collateral for their loans. 

Convert to cash 

If you can't find a seller who accepts bitcoin and doesn't want to use your assets for a mortgage, you can still use bitcoin to buy a house by selling your assets and converting them to cash. 
Before selling, you must carefully document every part of the process, from the initial purchase to the eventual sale. The bank or broker may reject your mortgage application or flag the deal if you do not provide a good paper trail. 

The successful example of selling real estate for Bitcoin in Portugal 

 

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An investor bought a three-bedroom apartment for 3 bitcoins, or about 110,000 euros, in the Portuguese city of Braga. It's the first real estate purchase for cryptocurrency without conversion into euros in Portugal and throughout the European Union. 
The transaction took place on May 5, 2022. The opportunity to buy real estate for cryptocurrency appeared in April 2022. Portuguese notaries were allowed to conduct transactions 100% by transfers in cryptocurrency. Before, it had to be converted to euro first. 
For the tax service not to consider the transaction as money laundering, the parties to the agreement must: 

  • prove the legitimacy of the money for which the cryptocurrency was bought; 
  • trace the path of funds to a digital asset – bitcoin; 
  • fill a digital wallet number; 
  • identify the parties to the transaction – their names, addresses, and sometimes the places of work; 
  • prove that the money is transferred from the buyer's digital wallet to the seller's wallet at the moment of transfer. 

Natalia Oganesyan, Real Estate Chief Operations Officer reports: «In Portugal, cryptocurrencies are not prohibited and are not regulated by law in any way. The Central Bank of Portugal does not consider cryptocurrency transactions illegal. However, the bank warns citizens about the lack of protection from the state: if the transaction turns out to be unprofitable, the losses will not be compensated». 

Crypto mortgage debut 

In 2021, the excitement about cryptocurrencies had reached its peak. Bitcoin briefly soared above $60,000. In response, crypto-savvy financiers have begun looking for ways to cater to mortgage borrowers with significant virtual money rates. 
An early offer came from Milo, a mortgage company that announced a new type of mortgage for true bitcoin proponents: homebuyers no longer have to sell their bitcoins to buy a home. Selling bitcoins to purchase real estate means paying capital gains tax and foregoing any future appreciation of bitcoins. 
Instead, according to Milo, borrowers can keep their bitcoins and mortgage them as collateral. Milo requires borrowers to hold back an amount equal to the balance of the Bitcoin mortgage, so borrowing $1 million means pledging $1 million in Bitcoin. As of June 2022, Milo advertises mortgage rates ranging from 5.95% to 6.95% on its crypto mortgages and has expanded its list of acceptable collateral to include Ethereum. 
Other niche lenders have followed suit – including Abra, XBTO, USDC.Homes, Ledn and Figure Technologies have announced crypto mortgages. 
Details vary from one lender, but crypto mortgages can come with high minimum balances and geographic restrictions. XBTO, for example, said in the spring of 2022 that its bitcoin-backed mortgages are only available for $1 million or more and only in Florida. However, it is working on expanding its geographic reach to all 50 states. 
However, this type of loan has an obvious drawback: if the value of the borrower's cryptocurrency assets falls below the loan amount, the borrower must provide additional collateral. 

Conclusion 

Like many other procedures, real estate transactions are considering using Bitcoin to buy and sell houses. Because bitcoin is a new currency, there are restrictions on sellers, buyers, and real estate companies willing to deal with bitcoin. 
However, selling with bitcoin is possible and allows sellers to profit with bitcoin. Buying with Bitcoin also will enable buyers to consolidate their profits and diversify their investment portfolio. 
 
 
 

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