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Can I buy house with Bitcoin?

bitcoin and real estate

January 11, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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One of the most significant advances in the digital age is the development of blockchain and cryptocurrency. This refers to technology that does away with central authorities such as governments and banks to control funds. Buyers and sellers interact without mediators. Bitcoin is now a legitimate form of payment in some fields. You can buy house with Bitcoin and avoid tedious bank transactions. 

Financial institutions have limits when dealing with large sums of money. Bitcoin gives you the freedom to move a lot of money. The transactions between banks, lenders, and other intermediaries can be hectic when buying a house. When one is trying to reduce expenses, the many service fees by banks add to the burden. This creates the need to find alternative forms of payment, where you feel in control.

Cryptocurrency offers the perfect opportunity for full control and reasonable service fees. With virtual currency, you drop the middlemen and limit the interest rates. You do not need to worry about a credit card or a conventional bank account. All you need is access to a mobile phone and computer. 

Understanding the concepts involved in buying a house with Bitcoin may be challenging. As it is a new development, you may be wondering where to buy bitcoin or how to make transactions. Below are some aspects of buying a house with Bitcoin that you should know;

How does one buy house with Bitcoin?

The critical element to a successful transaction is that both buyers and sellers agree. Thus, the first step is ensuring that the seller can accept Bitcoin as your form of payment. The cryptocurrency market is very volatile. The value of bitcoin may drop after the sale, which means huge losses for the seller. A seller can trade in the bitcoin as soon as the transaction is over to prevent such occurrences. 

It is challenging to project the market's direction, as there are no legal regulations. Thus, both parties must have enough information to buy house with Bitcoin and consent to the payment.

If the seller agrees, all you need is to reach an agreement on the last price then find a way to transfer the bitcoin to their wallet. You also need to figure out payment for companies and professionals that do not accept bitcoin. 

Selling a house involves several parties. You may involve a real estate agent or an inspection company to inform the buying and selling decision. When the seller accepts bitcoin, it does not apply to the other parties. If the buyer does not accept bitcoin payment, you can transfer your bitcoin into fiat currency then make the transaction. You can trade using peer-to-peer sites or use an exchange.

The Banks

When Mortgages involve large transactions, you may need the traditional banking system to store the money if a need for trading arises. Some banks do not accept cash from any cryptocurrency trades. This is because there are no regulations in the transactions, and in most cases, the bitcoin transactions are untraceable. 

When acquiring a mortgage, buyers undergo a lot of financial scrutinies to determine their stability. This may not be easy to gauge if you intend to buy house with Bitcoin. Additionally, some banks associate cryptocurrency with money laundering. Some banks are open to cryptocurrency, as long as they are favorable.

Property Agents

All in all, there are primary estate agents and sites that now accept bitcoin or have particular listings that allow bitcoin payment. They include; The Collective, Magnum Real Estate Agents, Sand Key Realty, Go Homes, and Agape Properties. 

Several property companies predict a change in home buying procedures with the onset of blockchain technology. The director at Go Homes indicated that soon, it will be faster to buy house with Bitcoin. The property will be more liquid, which will make fractional ownership possible through smart contracts.

Advantages

As indicated above, you reduce the cost of buying a house by cutting down on the middlemen's service charges. The process is also faster when there are few parties involved. Bitcoin trading charges are minimal compared to credit and debit card charges. 

When sellers specify that they only accept crypto, your chances of securing the property are higher. The majority of such sellers also offer discounts if you chose to buy a house with Bitcoin. The anonymity aspect of a bitcoin transaction is also a considerable advantage. You can get property and keep all your personal information private.

Disadvantages

The main risk with bitcoin transactions is market instability. Worst still, institutions like the UK protection scheme do not offer back up hacking when the bitcoin value declines. Due to such reasons, buying a property using bitcoin is somehow limited to Bitcoin miners. These are people who invested very early in Bitcoin, before the popularity. They are the only ones with enough currency to buy house with Bitcoin

Paying with bitcoin may make your house buying process more hectic as it is challenging to process insurance and property agent fees. The anonymity attribute may attract people with 'dirty' money. This is money from drug deals, money laundering, and other illegal activities. 

Can you buy house with Bitcoin in the Future?

Despite the risks involved, Bitcoin's popularity is still on the rise. The acceptance in other fields such as banking influences real estate. Young people are the leading demographic in receptiveness to Bitcoin transactions. Governments are also putting up regulations around bitcoin trading. Some already recognize it as a method of payment. This means that the future is promising for Bitcoin in real estate. Soon, it will equal the traditional currency.

Conclusion 

With many investments, to buy house with Bitcoin, you need to analyze the risks and advantages of your situation. It is possible to buy a property with bitcoin, but the option may not be available in your country. Since the general adoption is growing, the disadvantages above may not exist soon. You could start strategizing early and grab lucrative property deals in the future. Trends in the crypto market tend to favor early investors compared to those influenced by the wave.

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