Recently, the Bitcoin gamble guessing game ended up hitting a new record high and the cryptocurrency now faces its biggest challenge – many wonder if it will survive, or in what form. With regards to being utilised for real estate – is the risk worth the reward. “Just like any other form of currency, cryptocurrency is another form of investment,” said Eugen Klein, Principal of Royal LePage Sussex Klein Group. “Like any other investment, it can be risky and investor involvement must be balanced by weighing the risks and the rewards.”
Cryptocurrency is slowing starting to catch on but may take a hold of real estate – mainly when a seller hopes to garner media attention for a listing rather than some form of payment. Bitcoin is currently sitting at $7,429.83, is it okay for Bitcoin to be used for the purchase or sale of a home?
Short answer – yes you can use bitcoin, but there are a few things that you need to know:
1. Bitcoin is a real currency
Those who think Bitcoin can’t be utilized in the purchase process are most likely still utilising a flip phone and have a myspace account. Many independent businesses accept bitcoin, but even some big brands are getting into the act. It is a real currency, but many still see it is in its infancy.
2. Bitcoin transfers are fast and flexible
While many financial institutions make you pay a fee for the transaction, Bitcoin enables a smoother financial transition of your funds. It can be done for free and almost at will. You must be ready to have your money in Bitcoin form.
3. Attempting to buy or sell property using this currency is risky
With Bitcoin, there are great risks and rewards, and the thing is that a home seller or buyer would need to be careful about how the bitcoin is utilized. Much about the risk of utilizing bitcoin does come from the buyer side. What it comes down to is timing and you need to watch the rate to see how fluctuations are impacting the value. If it proves to continue to stay stable, then there might be more reason to buy and sell with the currency, but at this time it is still a risky proposition.
4. It can raise alarms
If a buyer attempts to purchase a home with bitcoin, it can raise a whole host of alarms. First off, Bitcoin comes with very little oversight, as such, it becomes a cause for concern and the seller’s realtor will ensure that a Fintrac is completed. This ensures that the money can be verified to ensure that it is not used in any illicit activities.
5. When Purchasing Property, Use Your Common Sense
The industry of real estate is notorious for lagging behind in technology and innovation, purchasing property with bitcoin can seem like a new fad or trend. Bitcoin can be another avenue for making purchase decisions. That’s why the Canadian market has been slow to buy into Bitcoin in real estate, and people are unsure about the staying power of the currency.
It’s not a walk in the park either way, if a home seller accepts the funds from the home sale through Bitcoin, for the CRA, he will need to verify where the money came from and declare it.
Buying and selling real estate with bitcoins may eventually get easier. The bigger question is if the currency can be trusted, what is its stability, and do you have proof regarding where the currency came from? All of these details mean that buying and selling home with Bitcoin can be an issue for the interim. A potential client would have to weigh risks and rewards.
Understanding the trends is just one step in our unique in-depth process to ensure that the special attributes of a project are paired together to create the right result – a successful sale for a client. Klein Group is here to partner with you in your acquisition or sale process.