Cryptocurrency is a hot topic in the investing world, and it has introduced people to alternative methods of payment, especially since some online merchants and physical stores accept it.
What about cryptocurrency payments for larger things, such as home or land purchases? Should real estate agents keep up with developments in cryptocurrency?
The effect of cryptocurrency on the economy
Well-informed real estate agents know that when a nation’s economy experiences significant fluctuations, changes are also visible in the housing market. Even though cryptocurrency exists as a virtual currency, it plays a role in our dollar-driven economy.
For example, when companies that trade on the stock market announce partnerships with cryptocurrency startups, public and investor interest peaks.
Cryptocurrency effects are often felt globally, especially as countries consider potentially making nation-specific cryptocurrencies.
Also, individuals often see the decentralized nature of cryptocurrencies as an advantage. There’s no need to have a bank account to own or transfer cryptocurrency.
During the banking crisis of 2008, housing prices fell more than during the Great Depression. If people feel confident that cryptocurrencies are the way of the future, they might enjoy being able to buy a home without the involvement of banks, as would be the case for those who hold wealth in cryptocurrency and are able to create a virtual all-cash scenario.
Potentially negative ramifications for would-be homebuyers
People often dream about purchasing their first homes for years. However, be forewarned if your buyers try to do so with cryptocurrency, as its values are notoriously volatile.
“As we saw with bitcoin in 2017, the value of cryptocurrencies can fluctuate wildly,” said Thomas J. Collura, a partner at Hodgson Russ’s Estates & Trusts Practice. “So the amount received for a home purchase may quickly change in value, even over a period of just a few hours.”
However, some savvy investors have gotten wealthy thanks to bitcoin and other cryptocurrencies.
If individuals depend on cryptocurrencies to build up their wealth with the intention of using the financial resources to buy homes, it’s more of a high-risk investment due to the volatility of cryptocurrency.
Staying aware of cryptocurrency market trends and not investing amounts that are too significant to lose can help future homebuyers protect themselves against substantial losses that occur before they look at properties to buy.
It’s crucial for people to make sure they firmly understand the basics of cryptocurrency and don’t start investing in it for any reason — to save up for a home or otherwise — without understanding the potential consequences.
People can buy houses with cryptocurrency now
The option of purchasing a house with cryptocurrency is not a future possibility. It’s happening now in some cities.
A New York City property developer recently finalized two condo sales paid for with bitcoin. Those transactions occurred with the help of a third-party company that accepts the cryptocurrency payment and converts it to cash.
Property sales in the U.K. happened via bitcoin, too. In those cases, the buyers secured their homes without putting forth deposits. Then, purchasers and their estate agents benefit from faster-than-average transactions.
Miami is another popular market for cryptocurrency home transactions. Many of the for-sale advertisements in that city specifically mention bitcoin as an accepted form of payment.
There are also dedicated property search websites for people with the desire to pay for their abodes with cryptocurrency. Those let users search for property on the market around the world, regardless of if they want to live in Texas or the French Alps.
Getting up to speed on cryptocurrency
If real estate agents choose to ignore cryptocurrency and don’t analyze how it’ll affect their industry, they’ll likely lose competitiveness in a fast-moving and demanding market.
Bitcoin and other cryptocurrency transactions are permanently recorded on a ledger called blockchain. By itself, blockchain has significance for real estate professionals because it creates transparency, plus provides a secure way to transfer money and data.
Fortunately, the internet increases ways for real estate professionals to learn about cryptocurrency and blockchain, helping them get informed and keep their knowledge current.
Ben, a cryptocurrency chatbot, is useful for learning foundational concepts on a mobile device. Then, it’s simple to go beyond the basics by enrolling in a free online course about cryptocurrency. Some of those offer certificates after completion.
There are also events in metropolitan areas, including Los Angeles, that allow for in-person networking and learning at cryptocurrency gatherings. Those could be ideal for professionals who prefer face-to-face interactions.
Cryptocurrency on the real estate radar
Cryptocurrency is no longer a niche topic understood by a relatively small group of individuals. It’s a reoccurring factor in housing transactions around the world.
Even when real estate agents don’t deal with them directly, they’ll notice the economic effects of virtual currencies.