Bitcoin has had more buying power than ever before. Learn how to sell and buy a home entirely in Bitcoin.

Table of Contents:

How to Sell and Buy a Home in Bitcoin

How to Sell a Home in Bitcoin

How to Buy a Home in Bitcoin

Pros of Buying a Home with Bitcoin

Close on your new home faster.

You can swap your online asset for a tangible one.

Cons of Buying a Home with Bitcoin

Taxes are more complicated.

Bitcoin real estate transactions are limited.

Frequently Asked Questions (FAQ)

Can I use bitcoin to buy a house?

How to buy real estate with Bitcoin?

Can you use bitcoin to pay for real estate?

Do I have to pay taxes if I buy a house with bitcoin?

Can you pay off your mortgage with Bitcoin?

How to Sell and Buy a Home in Bitcoin

When Sotheby’s International Realty revealed in September of 2017 that it had permitted one of the first Bitcoin property sales in the United States, a single bitcoin was worth $3,429.

A single bitcoin has skyrocketed today in value to about $36,785 since the Austin, Texas home sale, whose sale price was never disclosed. Bitcoin is a cryptocurrency backed by an online ledger known as the blockchain, and its value has made several early adopters into millionaires in a matter of months.

Bitcoin homes for sale will find the blockchain money exchange method to be uncomplicated. According to experts, when it comes to considering tax ramifications and other considerations, the buyer is the one who must deal with the most complexity. Read on to learn more about selling and buying a house with Bitcoin.

How to Sell a Home in Bitcoin

When a house for sale bitcoin only comes on the market, the process is easier for the home seller than for the buyer. Especially if the bitcoin house seller uses a company like Richr that allows them to list on MLS for free and get title services included for only $699.

Instead of using bank accounts, prospective purchasers will make an offer to buy property with bitcoins instead. Once the seller accepts, they then transfer the bitcoins to the seller’s digital “wallet,” or with an escrow company, which takes around 15 minutes to complete once the process is started.

When it comes time to close, the seller would also need to find a lawyer and/or a title insurance firm that would only accept dollars as payment, rather than bitcoin, in order to complete the transaction successfully. Buying real estate with bitcoin has yet to become a common practice between title insurance companies, and you need to use dollars to complete the transaction.

Because of the volatility of bitcoin, houses for sale with bitcoin who accept the cryptocurrency should be mindful of the currency’s daily swings. If they tie the asking price to a bitcoin premium, they may protect themselves from currency devaluation.

How to Buy a Home in Bitcoin

Given that the vast majority of the real estate industry still views cryptocurrency as a hazard or an unknown entity, it may be challenging to find a seller or an insurance company prepared to deal with the most widely used cryptocurrency, Bitcoin.

As long as you first “cash them out,” a large number of merchants, insurers, and other parties will be more than delighted to take bitcoins as payment. Some sellers are concerned about the potential of obtaining 25 Bitcoins in return for their property, and they are hesitant to proceed. However, that offer is a lot more exciting once they realize 25 Bitcoins in today’s market is $919,625.

When you go to buy house with bitcoin, you’ll have two options. The first is if the home seller is completely on board with a Bitcoin transfer. You’ll just need to hire a lawyer and/or title transfer company to finalize the sold house for Bitcoin. The second is cashing out your Bitcoin for real cash to offer to the home seller.

While using Bitcoin may seem like a great idea, homebuyers may be surprised at closing when they find out they’ve offered 25 Bitcoins, only to have a single Bitcoin go up by $5,000 in value. That changes the $919,625 price tag to $1,044,625. You’ll want to understand the pros and cons before proceeding with buying a home in Bitcoin.

Pros of Buying a Home with Bitcoin

The process of purchasing a new home using Bitcoin may be as easy as swiping your cryptocurrency wallet. As long as you find the right place, you can always cash in your Bitcoin and pay with dollars if the home seller isn’t interested in accepting it. On the other side, bringing your crypto assets to the offer table offers certain benefits.

Close on your new home faster.

In the same way that buying a house with cash removes the typical barriers of the mortgage process, using bitcoin to acquire a property can speed up the process. Bring enough bitcoins to buy the property outright, as you would with cash, and it can boost your offer.

You can swap your online asset for a tangible one.

The value of cryptocurrency often swings because it is highly volatile. As a result, your Bitcoin investment may depreciate in value and be worth less than you bought for it, or its value may climb. In the same way that stock market prices vary on a daily basis, the value of cryptocurrencies does too.

When purchasing a home with cryptocurrencies, you’re swapping a riskier asset for a more secure one. In the long run, the value of real estate will increase more slowly than that of cryptocurrency, but it will also be less susceptible to losses, which may occur at any time with crypto.

Cons of Buying a Home with Bitcoin

There are certain disadvantages to paying for a house using Bitcoin. It’s important to assess your particular situation to decide if buying a home with Bitcoin is right for you.

Taxes are more complicated.

Since they are primarily unregulated, cryptocurrencies may become problematic during tax season. Every time you spend, trade, or exchange your bitcoin, you must be aware of the capital gains tax that may apply. If you’re thinking of using your bitcoins to buy a house, you’ll want to talk to an accountant who’s experienced with these kinds of transactions.

Bitcoin real estate transactions are limited.

Cryptocurrency is still only used in a few real estate transactions. Only a tiny number of vendors are willing to take Bitcoin. The use of cryptocurrencies for real estate transactions is still in its infancy. In spite of its rising popularity, using bitcoin to buy real estate is still a relatively new phenomenon. In spite of this, the number of these transactions is rising.

Few people imagined bitcoins might be used to buy real estate when they initially became popular. We now know they can, and some people have actually chosen to utilize theirs to purchase a home or business. Is this the best option for you? You should carefully consider the advantages and disadvantages listed above. Before you hurry into any real estate deals, you might want to talk with your crypt-experienced CPA. The good news is that you may absolutely consider utilizing your cryptocurrency, and it might be the best option for you when paired with a smarter home service solution, like Richr.

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Frequently Asked Questions (FAQ)

Can I use bitcoin to buy a house?

People all across the world are purchasing properties with the aid of cryptocurrencies such as Bitcoin and other well-known cryptocurrencies such as Ethereum. The cryptocurrency sector is looking at a variety of applications for cryptocurrencies, ranging from home services to sales and purchases. Real estate purchasers are increasingly relying on cryptocurrency as a form of payment, and sellers can choose whether or not to accept bitcoin real estate as payment. Participants in the real estate market are turning to the blockchain’s power, transparency, and security as a viable alternative to traditional methods of recording property titles and transfers during the sales process.

The use of encryption protects all Bitcoin real estate transactions. You’ll need a digital wallet in order to complete a Bitcoin real estate deal. The majority of the time, you may pay for it using PayPal or a credit card, provided you use a reputable Bitcoin broker. In contrast, banks and credit card firms have prohibited their customers from utilizing cryptocurrencies such as Bitcoin to make transactions or make payments through their systems. Numerous theories have been advanced as to why this is taking place, in addition to the obvious worries of banks about liability and the ensuing disruption of the industry. Before funding a digital wallet, check with your bank to ensure that any financial transactions are completed without difficulty.

How to buy real estate with Bitcoin?

A search on the internet will turn up hundreds of advertisements for residences that allow you to buy with bitcoins or other cryptocurrencies as payment. Individuals and organizations alike are increasingly using bitcoin to buy things in the United States. You can use two methods to buy real estate with bitcoins:

Option 1: Conduct a real estate transaction involving Bitcoin solely. The seller’s digital wallet will receive the Bitcoin that was purchased by the buyer. It is possible that you may be required to utilize an attorney or an escrow agency to complete the sale.

Option 2: A real estate transaction including the use of Bitcoin and US currency.

Customers who purchase Bitcoins from a business that refuses to deal with the digital currency have the option of having their Bitcoins converted into dollars. You can use this to pay for the bitcoin down payment, as well as the closing costs and any transfer taxes that may be due on the transaction.

A difficulty may arise if the buyer is from a country other than the United States. Before you convert your Bitcoins for USD, you must first open a bank account in the United States.

Can you use bitcoin to pay for real estate?

An agreement between a buyer and a seller to accept bitcoin as a method of payment is all that is necessary in order to use a bitcoin property purchase method. It is necessary for both the buyer and seller to have bitcoin accounts and be knowledgeable about buying things with bitcoins and its operation in order to execute the real estate for bitcoin transaction successfully.

Bitcoin transactions cannot be undone after they have been confirmed and finished. As a result, buyers and sellers using real estate with bitcoin must have a high level of mutual trust in addition to being familiar with one another. Because traditional escrow companies are unfamiliar with cryptocurrency transactions, it is likely that a BTC or other cryptocurrency escrow will not be viable with them. Escrow companies that specialize in bitcoin real estate transactions are becoming increasingly widespread, and this trend is expected to continue.

Do I have to pay taxes if I buy a house with bitcoin?

The truth about buying a house with Bitcoin is that it isn’t actually exchanged for cryptocurrency unless you buy real estate with bitcoin directly from the seller. Profits made from bitcoin, which is treated as property in the US, will be taxed at a rate equal to capital gains. Non-residents of the United States will be subject to the tax laws of their native country. For all crypto transactions that take place in America, there are capital gains taxes and a 1-percent conversion penalty.

Can you pay off your mortgage with Bitcoin?

Imagine paying off one of life’s most significant costs – your mortgage – with an unpredictable bag of magic beans, with a value ranging from $11,000 to $60,000.

If you were to use Bitcoin to pay your mortgage, you’d be essentially doing the same thing.

People may now be able to purchase more products than ever before by buying things with bitcoin. Still, financial planners and other professionals warn they shouldn’t be utilizing it for this purpose. Even mortgage lenders are considering whether or not to accept bitcoin as a form of payment in the future, but as of now, your options are limited to proceed with a bitcoin property.

United Wholesale Mortgage, the country’s second-largest mortgage lender, submitted a request to the Federal Reserve in August to accept bitcoin real estate transaction payments, but the request was swiftly withdrawn. Despite clients’ initial interest in paying their mortgage in cryptocurrency, the company states that the vast majority of them have returned to their previous payment method of plain old US dollars.

No matter what currency you’re looking to use when selling your home, you can still save thousands in commission when you list for free on MLS with Richr. They’re the perfect solution for home buyers and sellers with Bitcoin, with title settlement services included for just $699. Richr is the innovative solution for your first house bought with Bitcoin.