Can You Buy a Home with Crypto?

Since cryptocurrencies are becoming increasingly popular with the tech-saavy and the bold investors, more and more people are wondering if it’s possible to buy things with these alternative currencies, including their next home. For example, there are now homes, commercial properties and land that you can buy using cryptocurrency.

How Do You Buy a Home with Crypto?

There are a couple things to keep in mind when attempting to buy a home using cryptocurrency. First, the sellers must be willing to accept the currency, which not all are, and second, your purchase will be treated more like a cash transaction, so no partial financing will be allowed.

If you are interested in a specific home, you’ll need to ask the seller if they will allow you to make an offer in crypto before you do so. Otherwise, you risk your offer being rejected outright, and that’s no fun at all. If you are not as picky, then you might want to look at homes that are listed with crypto payment as an option. These tend to be higher end homes, but there are still sometimes more average options. Let us know if you are looking for more information on this.

As for the second point, because cryptocurrency is still considered a volatile asset class, banks don’t want to get involved with a shared transaction using crypto. There are a few that will finance with crypto as your security, but they will usually ask for the total amount of the transaction in crypto as collateral, as well as the home in some cases.

Pros and Cons of Buying a Home with Crypto

For the crypto saavy, and anyone with significant crypto holdings, it might make sense to buy your home using your cryptocurrency. This works especially well if you’ve had it for years and have seen massive value appreciation. In that case, the $100 per coin that you might have put into Bitcoin years ago will help you buy a home that’s worth 200+ times that. Not a bad deal at all for you.

However, if you’ve recently purchased crypto, or you’re buying it just to use it to buy a home, it’s not necessarily guaranteed to play out in your favor. For example, if you bough Bitcoin on June 30th at $19,000 per coin for a $400,000 home, you’d have roughly 21 coins in hand. You’d write your sales contract for 21 Bitcoin, rather than $400,000, and until the closing date came around, the actual cost of your home in dollars will continue to float.

Even closing a couple of weeks later on July 19th, when Bitcoin was about $23,500, the seller would get an extra $94,500 that you weren’t counting on paying for that house. Suddenly, your $400,000 home because a $500,000, and there’s nothing you can do about it because you agreed to pay in Bitcoin and not in US dollars. This is among the biggest risks for buyers who choose to pay in cryptocurrencies.

If the market went the other way during that period, well, you’d have gotten a bargain. But because cryptocurrencies are so unpredictable, there’s simply no way to know what’s going to happen between contract and closing. Some people are transacting this way though, and there’s nothing inherently wrong with it, provided you understand the significant financial risks involved.

Need Help Closing Your Crypto Purchase?

There’s no better place to ask for a recommendation of a title company that can handle cryptocurrency transactions than your local, friendly real estate agents. Not only can we help you find the most state-of-the-art title and escrow services possible, we can also help you find movers, cleaners and tradespeople as well as interior decorators to help you get from the closing table into your home in a jiffy. Give us a call today. We are here to not just help you buy and sell your home, we are here to be your real estate resource for life!

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