There are many methods that real estate developers and sellers can use to reach more local and international buyers. One of these approaches is by using bitcoin to purchase real estate. Bitcoin is one cryptocurrency that has been embraced all around the world. However, there are factors that different parties must take into consideration like taxes and the purchaser's digital wallet.
In this article, you will find an explanation of the two methods through which bitcoin can be a payment method for acquiring real estate.
Method 1: All-Bitcoin Real Estate Transaction
In this method, the buyer transfers the payment in full by transferring bitcoins from their wallet to the seller's digital wallet with the help of an escrow agent or attorney.
Credibility Checks and Escrows
The seller or their legal representative's due diligence has to check the buyer's trustworthiness by performing KYC or AML checks. This way, they can find out if the prospective purchaser is on any sanctions or snubs. Most insurance companies will not insure sellers if their buyer's bitcoins are sanctioned. After execution of the contract of sales, the buyer usually pays a percentage of the total price as a down payment, but the seller does not directly receive these funds. Instead, an escrow service holds them until closing. There are many reliable escrow services. The seller or developer should do their research and find the most suitable one.
Tax and Price Flexibility
If the seller is a US citizen, then they must anticipate paying the required taxes. The same goes for the buyer if they are a US citizen. Both parties must prepare themselves to do so before closing on a contract. Prices in the market are likely to fluctuate. It will require both parties to be ready for any price volatility of the purchase.
Method 2: Changing Bitcoin Into USD
This method is effective specifically when the seller is not willing to receive bitcoin as payment. Therefore, the seller will request the buyer to convert bitcoins into US dollars for the down payment, taxes, and closing payment. It is easier if the buyer is a citizen in the US since they can use a licensed payment processer. If not, they can use an attorney who can easily facilitate the conversion of bitcoins to US dollars through a licensed payment processor like YouHodler.
There are multiple reasons people are alternating to doing real estate deals using Bitcoin. To understand why it is happening, here are some benefits you need to know:
Advantages of Bitcoin in Real Estate
Many experts will advise you that cryptocurrencies like BTC can have significant impacts on the real estate sector. This is because the blockchain tech serves to prevent fraudulent activities through the complete approved digital identification system. The blockchain helps protect the digital ID of the individual, which can come in handy when making mortgage payments, deed exchanges, and other financial events.
The tech supporting Bitcoin operations motivates real estate investments through fee reduction and security improvement online. An alternative means of investing is via fractional ownership. Instead of devoting an enormous sum of money to acquire a property, you have the option to trade fractions of the real estate tokens. When managed effectively, bitcoin exchanges are faster and more convenient than using traditional fiat currency.
Bitcoin operates in a manner that encourages more transparency throughout the entire transaction. Traders keep their details secure. The information is verifiable instantly, eliminating the need to involve more parties when making a transaction. It will save you a lot of money in the long run. You have no reason to doubt the convenience of using bitcoin for real estate payment as long as due diligence is paramount.
Should one consider buying real estate with bitcoin? Yes! In conclusion, with the proper understanding of how to use bitcoin for selling and purchasing, converting the bitcoins to USD, and legal and tax requirements, sellers can put up their real estate listings and attract many bitcoin holders, increasing their sales. The information above should come in handy as a guide to help you purchase US real estate using BTC. The real estate sector has been one of the best performing industries and including the use of cryptocurrency exchanges only makes things better.