How do you make a splash in real estate?
Competition is fierce, especially when dealing with 7-figure properties. This article highlights the economic benefits a seller and listing agent can realize by offering buyers the ability to purchase property using cryptocurrency and the potential issues that can arise without engaging the appropriate support.
If your objective is to broaden the potential buyer pool, allowing buyers to purchase real property with cryptocurrencies (e.g., Bitcoin, Ethereum, etc.), then you will undoubtedly face the following traditional barriers to entry:
- Compliance obligations imposed on seller
- Transactional risk for both buyer and seller
- Timing limitations / seasoning of funds
- Limitations on buyers obtaining title insurance
- Additional costs and time to buyer and seller (e.g., knowledge transfer, attorneys’ fees, etc.)
House of Coins, a Pomeranz Law PLLC brand and proprietary process, facilitates the transaction, allowing intangible assets to be used to purchase real property. The proven methodology addresses the above obstacles, offerings buyers and sellers the following benefits:
- Expands buyer pool and creates marketing “buzz” around the property
- Limits seller’s risk and obligations, including compliance obligations
- Minimizes transactional risk for both buyer and seller
- Shortens closing period from months to days
- Eliminates limitations for buyers to obtain title insurance
- No additional transactional costs to seller
Attempting to handle this type of transaction without a developed process can (and likely will) create issues and preclude the parties from proceeding with the sale. For instance, false promises from exchanges on the length of time to season funds are all too common. In this case, the buyer is unable to withdraw sufficient funds from the exchange (e.g., capped at $10,000 per day), resulting in a significant extension to the closing date, a cancelled contract or a purchase that will take place without cryptocurrency (e.g., cash).
Likewise, real estate professionals are limited to populating preexisting real contracts. These contract templates do not contemplate the parties using cryptocurrency to effectuate the sale. This results in the buyer or seller (or both) finding a contract attorney that understands cryptocurrency for real estate transactions. The result will be each party incurring expenses and internalizing a learning curve for a transaction that may never materialize.
The foregoing highlights a few potential pitfalls sellers and listing agents may encounter; however, a seller willing to accept cryptocurrency presents an amazing opportunity to differentiate a property and attract an untapped buyer pool. With the right support, cryptocurrency can be the detail your property needs to make that splash.