Maybe in Milwaukee you can use dairy cows to buy a home; in Texas, perhaps big hats and fake southern accents will do the trick. But for the Bay Area, crypto currency is a trend worth watching. The folks at real estate firm Madison Hunter’s Urbane SF team will work Bitcoin into your deal. “When you purchase a condo with the Urbane SF team, you will receive a Bitcoin perk. The amount of Bitcoin you receive will be 0.5% of the purchase price based on the Bitcoin market closing price at midnight on the day of escrow closure,” Madison Hunter notes. “Upon receipt of your cryptocurrency, you can either liquidate it whenever you choose or allow it to appreciate, in the hopes that it will grow and subsidize a significant portion of your purchase price in the future.”
Presumably here in the land of a zillion tech people, there will be many buyers who are looking to mine their crypto currency hoards to allow them to buy into the Bay Area’s notoriously competitive housing market. In December, Julie Gerstein wrote on Realtor.com that the real estate world is becoming increasingly friendly to crypto trades. For the most part, buyers will cash in their crypto holdings to buy a home. With bitcoin hitting $100,000, there are patient bitcoin owners who have some serious coin to spend on a new home. In other cases, you can get a crypto-backed mortgage. And “a smaller number of sellers is willing to trade crypto for property, some of which can be found on Propy, a blockchain real estate company that supports blockchain transactions,” Gerstein writes.
As she notes, the crypto market is “notoriously unstable.” Which is true, but I suspect most people who are in the crypto markets know that. Things have changed greatly since 2016, when (another Realtor.com article tells us) Los Angeles real estate agent Piper Moretti was trying to help her client use bitcoin to buy a $3.2 million home. “The listing agent was positive we were trying to scam everyone from Day 1,” Moretti told Realtor.com. “The escrow’s attorneys heard we were using bitcoin and kicked us out of escrow.” While she tried to save the deal, the value of bitcoin jumped, “her client made millions overnight, and they decided to buy a Lamborghini from a dealership that accepted bitcoin.” Moretti used that transaction to convince a new escrow company of the practicality of using bitcoin for big-ticket purchases, and the home sale was completed.
With bitcoin hitting $100,000, there are patient bitcoin owners who have some serious coin to spend on a new home.
Not all crypto currency is equal, obviously, just as not all dairy cows are worth the same amount. But when you’ve got the currency that a seller is willing to accept — and that’s always the basic deal with real estate, finding that Venn overlap where the buyer’s available assets match the seller’s willingness to settle — it can work out.
Not all mortgage lenders will accept crypto, but many do. The number who do will likely continue to grow as the secondary mortgage markets learn to take crypto in stride. The Federal National Mortgage Association — popularly known as Fannie Mae — and The Federal Home Loan Mortgage Corporation — a.k.a., Freddie Mac — were created decades ago to provide secondary mortgage markets and ensure liquidity and stability for housing markets. Both of them have established rules for using crypto currency in qualifying mortgage transactions. (Check out Fannie Mae’s guide.)
Crypto is very volatile, and regulations will continue to evolve, perhaps especially because of a new administration in Washington, D.C., that is perceived to be more crypto-friendly than its predecessor. So checking in on the latest guidelines and rules, reading up on the process, and finding an agent who is knowledgeable and comfortable with the matter are good tips for potential buyers or sellers looking to work crypto currency into their home transaction.