Some may have heard the term cryptocurrency but are not really too familiar with it as yet. However, it would appear that it is a currency that everyone is eventually going to have to adapt to. It may be the way of the future. In fact, you may even be able to buy a house with it. Which is not something you have to wait for the future to do. It is something that is taking place in the here and now.
What is Cryptocurrency?
Cryptocurrency is electronic currency. One of the most common types is bitcoins. It has no formal financial institution overseeing it. The bitcoin was originally designed to be a peer-to-peer electronic cash system. Basically it is electronic cash but it can be complex and detailed. All of which should change in the future as people in general become more familiar with it.
Can it Really Be Used to Buy Houses?
Bitcoins are now being used to buy almost anything. But there are pros and cons to it. Especially when looking at major purchases like real estate.
There is no middle man for the financing. The transactions take place directly between the buyer and the seller. The real estate commissions and even the legal fees can also be paid in bitcoins.
The speed in which the real estate transaction can be completed in respect to the finances is beneficial. It can take anywhere from 10 minutes to a day to attend to the financial matters of house buying and selling.
Both parties have to be willing to deal in bitcoins.
If legal issues arise, both parties have to be compliant.
To date, bitcoin home buying is only applicable to cash deals and not mortgaged homes.
Are Bitcoin Homes Being Listed?
The use of cryptocurrency has actually grown to the point where real estate agencies are now listing homes in bitcoin currency.
The first transaction that ever took place with bitcoins and real estate for home buying took place in Texas.
How Successful Can This Be?
One thing to remember with cryptocurrency including bitcoins is that they can change in value. This is what makes this currency volatile. One day it can have a specific value. Then the next day the value has dropped. It can also happen in reverse as it did for one unsuspecting home buyer.
An individual had a house transaction taking place that had a bitcoin value of $750 at the beginning of the transaction. By the end of the transaction, the bitcoin value had increased to $1,000. This made for one happy buyer, as he ended up making 25 percent in the currency exchange rate. After everything was said and done with the deal, the buyer ended up with an extra $1.3 million.
Before rushing out to invest in bitcoins or buying real estate with them, keep in mind that this is an isolated incident. Again, bitcoin value can be volatile, and can just easily decrease in value.
What If You Only Have Bitcoins for the Down Payment?
At first when bitcoins were being used in the real estate market they were only applicable when there was no mortgage involved. But it seems as though now combination deals of bitcoin and cash can be completed. Meaning an individual can use bitcoins for their down payment. Then the mortgage can be arranged in cash. This is going to open up some new doors for those who want to take their chances with bitcoin investing.
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