Bitcoin took a wild ride in 2017, reaching a record high above $19,800 in December and then plummeting below $11,000 in the same month.
The cryptocurrency isn’t just a risky investment opportunity for the adventurous; it’s becoming an alternative way of paying for regular things. Over 100,000 merchants worldwide accept bitcoin, including Microsoft, Expedia and at least one Subway sandwich shop.
You can also buy a house with bitcoin, and it’s not as hard as you may think. You just need one thing: For the buyer and seller to agree on exchanging bitcoin for the property.
Consider the first single-family home sale in Texas involving bitcoin, announced in 2017: “The challenge, which actually wasn’t all that challenging, was to figure out who would do an exchange that large,” J Kuper, broker at Kuper Sotheby’s International, told CNBC’s Diana Olick.
The parties involved completed the transaction with BitPay, which turns bitcoin into dollars, because the seller wanted U.S. dollars, Olick reports. BitPay has handled other real estate transactions, including a Lake Tahoe property that sold in 2014 for 2,739 bitcoins, or $1.6 million.
For one real estate owner and developer in Manhattan, BitPay won’t be necessary. Benjamin Shaoul of Magnum Real Estate Group says he has buyers who want to pay with bitcoin, and he plans on keeping it.
“I think it will become a long-term means to make payment,” Shaoul told Olick.
Sites like Open Listings are making it easier to find properties you can purchase with bitcoin with a search tool that allows you to look for the words “bitcoin” or “ethereum.”
All the same, since the idea of using virtual currency to purchase real estate is so new, there is a “still a lot of nervousness for newcomers to the currency,” Olick reports, adding “much of the concern may be around the lack of regulation so far in cryptocurrency and the lack of understanding as to how gains in bitcoin are taxed.”
Some experts warn that buying real estate with bitcoin won’t be simple in every case. As Open Listing notes, “Even if you are able to find a seller that’s willing to accept your offer in bitcoin, it can be tricky to find title insurance and escrow companies who feel comfortable handling virtual currency transactions. To take on your home purchase, they may require you to cash out your bitcoin so that your transaction can be treated more like a traditional house purchase.”
But at the end of the day, if you want to buy a house with bitcoin, there are ways to make it work.