You might have seen a recent news item about a local gentleman who agreed to accept Bitcoin for his Coral Gables house, which he had put on the market for $6.4 million. I hope you did, because that’s my listing! (Along with my business partner, Carol Cassis.)
This is certainly the first home I have listed with the option to purchase in this new and strange form of currency, but I am confident that it won’t be my last. In fact, I believe we are on the leading edge of a new economic trend that will transform the way real estate is bought and sold, especially here in South Florida.
The “What is Bitcoin?” section of Bitcoin.com describes it as:
“…A Peer-to-Peer Electronic Cash System... a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is perhaps best described as ‘cash for the Internet,’ but Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence. It is also known as digital cash, cryptocurrency, an international payment network, the internet of money — but whatever you call it, Bitcoin is a revolution that is changing the way everyone sees and uses money.
All Bitcoin transactions are recorded permanently on a distributed ledger called the ‘blockchain.’ This ledger is shared between all full Bitcoin ‘miners’ and ‘nodes’ around the world, and is publicly viewable. These miners and nodes verify transactions and keep the network secure. For the electricity they use to do this, miners are rewarded with new bitcoins with each 10-minute block (the reward is currently 12.5 BTC per block).”
For a more complete description, I highly recommend visiting https://www.bitcoin.com/info/bitcoin-what-is-it-and-why-is-it-important
My first experience with Bitcoin came back in 2014, when I sold the aforementioned house to the current seller, who is involved in the world of investment funding and financing. After he moved to Miami, I got to know him better and found out that he was one of the very early Bitcoin investors. He explained that Miami Beach hosts a Bitcoin convention every year, so I attended and found it amazing to meet all these like-minded and creative individuals who were clearly on to something. It was like a Steve Jobs meets Star Trek convention. Truly fascinating.
When we met with the seller again this year, he explained that he wanted to sell the house, but would only put it on the market if we announced the fact that he was willing to accept Bitcoin as a form of payment, in addition to traditional forms of payment. Obviously, we were more than happy to comply.
You might think we were the first to involve Bitcoin in a real estate transaction, but this phenomenon has been happening for some time. A Las Vegas casino developer made a similar Bitcoin-acceptance announcement for his home a few years ago. Recently, a Bitcoin home buyer actually made a $1 million profit on his purchase when the currency’s value fluctuated dramatically after the sale.
In a September 2016 article entitled “Bitcoin’s Future in Real Estate,” Realtor magazine stated, “…there are more than 2.5 million items you can use Bitcoin to buy — including real estate. Bitcoin sites like BitPremier, which sells luxury items, continue to crop up. If a real estate agent, seller, or financial institution is willing to take Bitcoin, there’s really no stopping it. Real estate agents, brokerages, appraisers, title companies, and more are stepping up to the Bitcoin plate, hoping they’ll score more business by accepting this currency.”
It would seem that an industry like real estate, which already has a high comfort level with technology and the electronic exchange of large sums of money, will be a natural fit for Bitcoin in the coming years.
Mainstream acceptance, however, is major hurdle that Bitcoin advocates will need to surmount. Again, the concept is a little challenging to understand, and already we have seen Bitcoin-related headlines about hackers and criminals that can de-legitimize the very idea of crypto-currency. In my opinion, some kind of serious regulation will be needed before Bitcoin hits Main Street.
But I do believe that acceptance will happen sooner rather than later. The world changes extremely fast these days.
If I had told you 10 years ago that you would have a fleet of cheap taxi drivers at your disposal via your cellphone (which you would also use to pay these drivers); or that you would have an entire library of TV shows and movies available on your phone or tablet for less than $10 a month; or that you would be taking photos of your checks to deposit them, and doing all your banking online, would you have believed me?
Industries, businesses, and careers are being affected by this dramatic globalization and modernization, and real estate is no different. It seems clear to me that banks and title companies will be doing everything in a crypto-recorded fashion within the next decade, and our transactions will eventually become faster — and safer — under this system.
Does anyone know of a globally friendly city that might embrace a digital currency which moves legally and safely across borders, allowing international buyers to retain the value of their money? Obviously, Miami is an ideal market for Bitcoin, giving buyers and investors from South America, Canada, Russia, Asia, and the Middle East the opportunity to make their purchases quickly and smoothly. Our city has a tremendous opportunity to be a trendsetter in this regard, and I encourage my fellow real estate professionals to bone up on this topic and embrace the change that is already upon us.
Will my listing find a Bitcoin buyer? I am realistic enough, as is my seller, to know that it is much more likely that we will secure a conventional buyer. However, I am also idealistic enough to believe that, in the near future, Bitcoin-related home sales will be too commonplace to even warrant additional headlines.
Stephan Burke is a member of the Master Brokers Forum, a network of real estate professionals in Miami, and a Realtor associate with Brown Harris Stevens. He can be reached at 305-215-7833 and firstname.lastname@example.org.
This piece, written for Business Monday’s ‘Broker’s View’ space, reflects the opinion of the writer and not necessarily that of the newspaper. Got a Broker’s View? Realtors may submit columns for Broker’s View of 700 words to rclarke@MiamiHerald.com. This feature is intended primarily for residential brokers, who will be given preference, but pieces about commercial real estate will also be accepted as space allows.