Bitcoin and blockchain technology are becoming more common, and there is speculation within the real estate industry if this form of payment should be accepted to purchase homes.
Headlines were made in 2013 when a New York homeowner advertised he would accept Bitcoin as payment for his $800,000 home. He felt this tactic would hold a greater appeal for younger and international buyers. Bitcoin is a type of cryptocurrency which is essentially digital money. There are currently over 2.5 million items available for purchase with Bitcoin. This had led to real estate agents, appraisers, brokerages and title companies hoping to obtain additional business by accepting Bitcoin.
Bitcoin is facing a lot of the same obstacles as the first credit cards introduced. The key to making credit cards acceptable was for people to understand exactly how they worked. This is more challenging with Bitcoin because it is more complicated. The first major retailer accepting Bitcoin was Overstock.com, and many have followed since.
Visa Abstract was the first title company to begin accepting Bitcoin. When Bitcoin is accepted by a title company at closing, they are also accepting the risk. Any agent can refuse to accept Bitcoin from the purchaser if they are representing the seller. The value can fluctuate wildly, so many agents find a title company preferable.
Chances are excellent cryptocurrency will become an important part of real estate transactions in the future. Whether this will be Bitcoin or a different cryptocurrency is still unknown. Once cryptocurrency is widely accepted in the field of real estate, it stands to reason this is how many homes will be purchased.
Provided the homeowner is using a licensed agent, and a reputable title company and lender, there should be no problems with the transaction. Although many people still see Bitcoin as speculative, there is no doubt blockchain technology has become a permanent part of society. Bitcoin constitutes a public record, it is secure and easy to verify, and the information is accessed easily and quickly. This presents an exciting opportunity for the industry of real estate.
The title and mortgage process would be much faster if the blockchain were used to secure property titles. Since documents could not be forged, fraud would be prevented. This is what the IBREA or the International Blockchain Real Estate Association is working towards.