This past September, I wrote an article for Business Monday that described the concept of Bitcoin, touted its virtues for the purchase and sale of real estate, and singled out Miami as an ideal laboratory for this phenomenon. At the time, my business partner Carol Cassis and I had just listed a multimillion dollar home in Miami’s Ponce/Davis area, between South Miami and Coral Gables, for which the seller had agreed to accept Bitcoin as a form of payment, and the resulting publicity created a flood of questions and curiosity. (Full disclosure: I am also a Bitcoin advocate and investor.)
In December, we were delighted and honored to be part of America’s first purely “Bitcoin to Bitcoin” real estate transfer for a different Miami property; an upper east side condominium which sold for 17.741 Bitcoin, or the equivalent of $275,000.
While there have been some Bitcoin-associated real estate deals in the past, they involved the conversion or transfer of the digital currency into cash. This exchange was completed entirely with Bitcoin, with no cash or credit involved, and we have found no record or mention of any other sale like it in the U.S. The sale took place on Dec. 22, and I can promise you it ushered in a very special Christmas for all of us to be part of such a unique experience. (We may have begun celebrating a little early!)
Much has been written recently about what Bitcoin is and how it operates; https://www.bitcoin.com is a good source of information, and I have described it in more detail in my previous article. Essentially, Bitcoin is a digital currency stored in a computer and it is sent and received from one party to another. All Bitcoin transactions are permanently recorded on a shared viewing site online, a ledger — the blockchain.
While I predicted a Bitcoin-friendly future in Miami real estate, even I was shocked at how soon this historic transaction went from theory to reality.
(Admittedly, a perfect storm of factors converged to make the December transfer possible: Both the buyer and seller were Bitcoin enthusiasts and had already had some “back and forth” conversations before we came into the process. My team’s four years of real estate Bitcoin experience allowed the deal to go smoothly.)
The realist in me believes that Bitcoin-only sales like this are likely to be exceptional and newsworthy for some time, until mainstream comfort with Bitcoin reaches a higher level of critical mass. My optimistic side believes that won’t take long, and that by 2023, 35 percent to 40 percent of all real estate sales will be cryptocurrency-related.
Historic impact and curiosity aside, a major benefit of Bitcoin-only real estate deals (as opposed to traditional cash or mortgage transactions) is the dramatic reduction of the closing window.
In a traditional real estate sale, once the buyer and seller sign a contract on a price, there is typically a 30-day window to reach the closing, mostly to resolve banking and financial matters as well as any physical issues with the property. In this case, we went to contract on Dec. 8 and closed on Dec. 22; a total of 11 business days. (It would have taken even less time, but we had to resolve an issue with the seller’s mortgage.) Of course, the closing was handled by a local title company, satisfying all legal and municipal concerns.
We remain fully committed to the tried and tested way of selling homes through cash and mortgages. But we are “all in” on the idea of Bitcoin being the future of real estate transactions — a future that is already upon us.
Stephan Burke is a member of the Master Brokers Forum, an elite network of the top real estate professionals in Miami, and a Realtor-Association with Brown Harris Stevens. He can be reached at 305-215-7833 and/or firstname.lastname@example.org