Buying a house with BitcoinRecently, Porcupine Real Estate’s Mark Warden became the first real estate agent in New Hampshire to transact a sale entirely in Bitcoin. How’d he do it? Below is a primer to buying and selling a property using cryptocurrencies.

Choosing an Agent

You’ll want to use a real estate broker who is well-versed in cyrptocurrencies so that the offer can take into account the intricacies associated with purchasing a property with Bitcoin, Dash, or other form of payment.

Making an Offer

The offer itself should take into account the potential fluctuations in the value of the coin vis a vis USD. For example, you might want to include a “price safety relief valve” in case the value drops significantly prior to closing. The offer can include a contingency that the conversion USD/BTC rate doesn’t exceed or dip below a mutually agreed upon number. The purchase/sale price can be specified in either USD or BTC or some combination thereof. The earnest money deposit can also be denominated in the cryptocurrency. It can take two to three weeks to close on a home once you are under contract. Purchase agreements are state-specific, so we recommend using a local REALTOR who knows the area and the local customs and regulations. If you are in New Hampshire, we’ve got you covered!

Finding a Title Company

Finding a title/escrow company (or closing attorney) that will settle the transaction in crypto is important. For Mark’s transaction, we utilized a local title company (Sweeney Title Services in Nashua) with which we’ve had a long professional relationship. The title attorney opened a Bitcoin wallet to hold the escrow deposit, which was then sent to seller at closing.

Dealing with a Lien

In order for a transaction to be conducted in Bitcoin, it’s easier if the seller owns the property outright, i.e. no mortgage lien on the property. If there is an outstanding mortgage to be paid off, either the seller will have to fund that by depositing the amount with the title company prior to closing or the title company will have to receive enough crypto or USD from the seller in advance of the closing to complete the mortgage payoff. If the title company receives Bitcoin to cover the payoff, there will be some conversion-to-USD fees and some risk of a drop in value that will be borne by buyer, seller, title or some combination of all three parties.

Closing

The actual settlement process of sitting down together at the closing attorney’s office is straightforward and takes less than an hour. It’s similar to a cash transaction, without the time-consuming and burdensome loan/mortgage paperwork that is common in most transactions. The new owner will receive clear title via the deed, which will be recorded at the county registry by the title/escrow company or closing attorney, depending on your jurisdiction. There will be closing costs for both parties, which may include transfer tax (tax stamps), title insurance, pro-rata property taxes, commissions, recording fees and attorney’s fees. The settlement agent may require USD funds for these costs. In the future, as more title offices adopt crypto, they may accept payment for the fees in Bitcoin or other virtual currency. Remote closings with an out of state buyer or seller are easy to manage.

For more information on buying or selling using cryptocurrencies, contact Porcupine Real Estate.

Porcupine Real Estate assists with buying or selling homes in New Hampshire, and also helps with finding rentals. Founded by early mover Mark Warden, Porcupine Real Estate is comprised of Free Staters committed to helping clients find the right town and the right property. In order to make the liberty community as successful and powerful as possible, it’s important to support the people, causes and businesses that our community members represent. We practice that support every day and hope you will do the same by engaging our professional services.