Can You Buy a Home with Cryptocurrency?

Cryptocurrency
Cryptocurrency

It’s no secret that the housing market is booming, and prices are going through the roof. In some areas, it’s becoming impossible for people to purchase a home without help from family or friends. And in other cases, people are turning to cryptocurrency as a way to pay for their homes.

A study conducted by the real estate website Trulia found that in 2017, 8% of home buyers used cryptocurrency to finance their purchases. This is up from just 1% in 2016.

So, that is evidence enough people are using cryptocurrency to buy homes. But what about the process? Can you actually purchase a home using cryptocurrency?

Here’s what you need to know.

What is Cryptocurrency?

So, what exactly is cryptocurrency? Cryptocurrency is a digital or virtual currency that uses cryptography for security. It is not issued by any central authority, making it decentralized. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.

Since then, numerous other cryptocurrencies have been created. As of January 2018, there were over 1,300 different cryptocurrencies with a total market capitalization of over $600 billion. In addition, Bitcoin and other cryptocurrencies have skyrocketed over the past year.

As the popularity of Bitcoin and other cryptocurrencies has increased, so has their usage. Cryptocurrency can purchase goods and services or trade like any other asset. And as the real estate market continues to heat up, more and more people are using cryptocurrency to buy homes.

How to Buy a Home with Cryptocurrency

If you’re looking to buy a home with cryptocurrency, there are a few things you need to know.

Find a Bitcoin Marketplace

A Bitcoin marketplace is an online platform where you can buy and sell products like homes, cars, and electronics using cryptocurrency. These marketplaces work similarly to traditional online marketplaces.

You can find a Bitcoin marketplace by doing a simple Google search. Once you’ve found a marketplace, create an account and verify your identity.

Choose Your Bitcoin Wallet

A Bitcoin wallet is a digital storage space for your Bitcoin. There are many different types of wallets, but the two most popular are hardware and software wallets.

  • A hardware wallet is a physical device that stores your Bitcoin offline. This makes it much more difficult for hackers to steal your Bitcoin.
  • On the other hand, a software wallet is an online account that stores your Bitcoin.

While software wallets are more vulnerable to hacking, they’re also easier to use. So, if you’re new to cryptocurrency, you may want to start with a software wallet.

Once you’ve chosen your wallet, you’ll need to fund it with Bitcoin. You can purchase Bitcoin on a cryptocurrency exchange or through a peer-to-peer transaction.

Once your wallet is funded, you’re ready to start shopping for a home.

Find a Home

Now that you’ve got your Bitcoin, it’s time to find a home. You can search for homes on traditional real estate websites like Zillow or Trulia.

Or, if you’re looking for a unique property, you can search for homes on a Bitcoin marketplace. Once you’ve found a home you’re interested in, contact the seller and let them know you’d like to purchase the property using Bitcoin.

If the seller is open to the idea, you can begin to negotiate the terms of the sale. Once you’ve reached an agreement, you’ll need to have the property appraised to make sure it’s worth the amount of Bitcoin you’re willing to pay.

Make an Offer

If the seller is open to selling their home for cryptocurrency, it’s time to make an offer. The offer will be made in Bitcoin and based on the property’s current market value.

Once you’ve made an offer, the seller will have a certain amount of time to accept or reject it. Then, if they get your request, you’ll need to sign a purchase agreement and put down a deposit. The deposit is typically around 10% of the total sale price and is held in escrow until the closing.

At closing, the purchase price balance will be due in Bitcoin. Once the transaction is complete, the home will be officially yours!

Tips for Buying a Home with Cryptocurrency

If you’re considering buying a home with cryptocurrency, you should keep a few things in mind.

Be Prepared for Volatile Prices

Volatile prices are one of the most significant risks of buying a home with cryptocurrency.

Cryptocurrencies are known for their volatility, and prices can fluctuate wildly. For example, in early 2018, the price of Bitcoin dropped by more than 50% in just a few months.

If you’re not prepared for volatile prices, you could lose a lot of money. So, before buying a home with cryptocurrency, ensure you’re financially prepared for any potential price swings.

Get Expert Help

Another thing to remember is that buying a home with cryptocurrency can be complicated. There are a lot of steps involved, and if you’re not careful, you could make a costly mistake.

That’s why it’s essential to get expert help. If you’re unsure where to start, consider talking to a real estate agent or financial advisor. They can help you navigate the process and make sure you’re making the best decision for your unique situation.

Be Prepared for a Long Process

Just like any home purchase, be prepared for a long process. Buying a home with cryptocurrency can take several months to complete.

While buying a home with cryptocurrency can be complicated, it’s also an exciting way to purchase a property. It could be an excellent option for you if you’re prepared for the risks and willing to put in the time.

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