Yes, your client can buy a home with crypto

That's right - your client can buy a home with crypto. Any home, in fact (as long as it's for sale.)

I'm not referring to the "TrendyTown's first all-Bitcoin real estate sale!!!" thing — where you manage to find a seller that’s willing to accept crypto and happens to be selling the perfect house for your crypto buyer. The luck & coincidence involved in that scenario belongs in a script from a John Cusack movie.

No, I mean your crypto-holding client can shop for a home with you on the MLS without having to worry about crypto-friendly sellers. You'll handle them just like a cash buyer.

I'll explain.

TLDR: There is a very simple agent-friendly solution for clients that want to buy real estate using crypto assets, and it doesn’t require a crypto-friendly seller. Present  your crypto clients as cash buyers with RealOpen.

To begin, let’s just review the flow of funds in the simple, preferred, and time-tested cash transaction:

In the cash scenario we use standard contract docs, the buyer simply transfers funds from their bank account to the escrow office, and escrow disburses fiat funds when the deal closes. Simple, fast, and painless.

Now let’s consider that magical scenario where you find the perfect home for your client that has a serendipitous crypto-seeking seller:

Aside from the luck part of this home search, you’ll also notice the middle section of the flow diagram where you’ll need to find attorneys to draw up custom contracts and addenda, negotiate a price based on likely volatile currencies, and figure out how to insure title. The flow diagram looks simple…but everything else about it is complicated and not really feasible other than one-off cases.

So how can we help those crypto clients to find the perfect home and convert their digital dinero to tangible real estate assets? Enter RealOpen - a clever proptech-ish firm that was built to facilitate this very scenario: 

You may recognize most of this flow diagram, as it’s simply a traditional cash sale once the buyer transfers sufficient crypto to RealOpen. As the agent, you’ll present your client as a cash buyer, use a standard cash purchase contract, and nobody other than the buyer needs to have any knowledge, comfort, or familiarity with cryptocurrencies. In other words, you don’t need a crypto-friendly seller because it’s a cash transaction. This is a beautiful simplification of what was previously a difficult and complex task.

To be thorough I should include the other option: your crypto client can always convert their assets to fiat funds before you take them shopping.

This is likely what most agents suggest when first presented with a question from a crypto client. It seems reasonable to us, right? Just sell the asset and use the proceeds to buy what you want! Unfortunately it’s just not feasible (nor desirable) for our crypto-collecting clients to liquidate large sums in this manner. 

1. The assets are sold on public crypto exchanges, so selling large amounts of any currency drags the sale price down (referred to as slippage) - meaning it’s a lossy endeavor that costs our client significant amounts of money. For larger transactions this loss can be upwards of 10%.
2. Crypto exchanges have become increasingly restrictive on cash withdrawals. Depending on the exchange, your client may be limited to a series of individual withdrawals of as little as $10,000 each. That’s obnoxious for most, and ridiculous for higher amounts.
3. Our crypto clients don’t like it. Really…they have accumulated huge amounts of crypto for a reason. They believe in it and they don’t want to be holding excess fiat cash. This Hard Way scenario requires them to cash out before starting the purchase process, meaning they trigger a taxable event, exit the crypto market, and are likely left with excess cash after the purchase. It’s a sloppy plan that most savvy crypto holders will reject.

In summary: Play the hero the next time you’re approached by a client that wants to buy real estate with crypto. This solution allows your client to shop for a home without expected restrictions, saves them huge amounts of time and money, and makes your life easier as well.

Full disclosure - yes, I am involved with RealOpen. But as a full-time broker I absolutely appreciate and leverage this powerful solution in practice.

About RealOpen

RealOpen is the easiest and most efficient way for crypto holders to purchase real estate. With the only crypto scoring system, RealScore^TM, RealOpen protects property sellers by validating buyers and instantly converting their offers into cash at closing.

About Johnny Schiro

Johnny is broker and co-owner of Icon Real Estate, - Houston’s most innovative  independent brokerage. Contact Johnny at johnny@houstonicon.com or (281) 627-2486.