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February 5, 2018
Recently, we've begun to see cryptocurrencies such as Bitcoin shake up the real estate market. There have been a number of news stories featuring luxury property owners requesting Bitcoin as the preferred method of purchase. Real estate agents and sellers are also hoping to lure the newly wealthy cryptocurrency investors by touting their Bitcoin-friendly listings. That being said, there are still reservations when it comes to Bitcoin. There are concerns over the currencies' extreme volatility and lack of transparency. Like it or not, cryptocurrencies look like they are here to stay in one form or another, and it is important to have an understanding of how they can be used.
Bitcoin operates through a blockchain, a series of code that creates a record of every transaction and every access point. Every keyholder has their own unique access code, allowing them to access a blockchain from virtually anywhere. Unfortunately, these systems can be vulnerable to hackers. So, for now, Bitcoin transactions have not entered the mainstream. When it comes to South Florida real estate, cash is still king.
To avoid engaging in shady deals, Bitcoin transactions can use “Anti-Money Laundering” and “Know Your Customer” software, both designed to determine the source of funds that are paying for a property. There are also statewide limitations. The few Florida deals that have gone through involving digital coins were ultimately reflected in dollars, out of necessity. Blockchain contracts are currently accepted as legal tender in states like New York and Arizona, but that’s not yet the case for Florida.
Closing a real estate deal using digital currency can be a complicated process. Here are some important points to keep in mind along the way. Make sure you work with a real estate professional who fully understands cryptocurrency and perhaps ask if they own and digital coins themselves. Then you need to agree on a price and lock in a closing date and time. That will be when the dollar price will be agreed upon in digital currency. You will also need to factor in having to pay the attorneys, real estate agents, title escrow agents, etc. in dollars. Finally, the deed will need to be recorded. n the future, cryptocurrency supporters hope that recording deeds will be done with blockchain. For now, deeds are recorded with each county’s property appraiser.
Source: The Real Deal
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