More luxury real estate agents are accepting crypto

Luxury real estate is going crypto, and this is a sequential step in the sector’s development. Real estate is related to one of the highest-value transactions, so it is crazy to pay with cash. Moreover, the number of crypto enthusiasts is also increasing. So, it’s no wonder such a payment method as cryptocurrency is picking up steam. Three top Sotheby’s International Realty agents explain why learning about crypto-assets can benefit your business.

Tony Tate, Global Real Estate Advisor at Premier Sotheby’s International Realty, began mining Bitcoin over a decade ago. He began to invest in real estate and other ventures. Michael Kelczewski, Real Estate Broker with Brandywine Fine Properties, encountered the now-famous whitepaper by Bitcoin creator Satoshi Nakamoto. He began to educate himself in the burgeoning space.

For Kevin Pane of Sotheby’s International Realty – Encino Brokerage, it started when he was assisting his brother with a client’s portfolio management. “I was looking at all the gains and all the different companies—the returns were unbelievable,” he says. “But it’s not as though you put your money in today and you’re a millionaire tomorrow. Each token represents real companies doing real business in real markets, and it’s important to understand what’s happening.”

Crypto fluency builds credibility with buyers

Inquiries about transacting with cryptocurrency are becoming increasingly common in luxury markets. Often, buyers specifically ask about Bitcoin; as the original cryptocurrency, Bitcoin is viewed as a barometer of the exchange rate for crypto as a whole. And it can fluctuate widely.

“Crypto is still the Wild West,” says Pane. “The SEC covers the stock market—there are rules to insider trading and there are laws that exist for financial accounting. There’s none of that in crypto.”

One benefit—and potential challenge—he points out is that because all transactions live on the distributed ledger. All due diligence records are readily available. Through “smart contracts,” blockchain technology could quickly connect buyers and sellers over a digital exchange. “It’s important that people understand the tax ramifications on every single transaction, because the IRS is absolutely looking at crypto, as they should be,” says Pane.

“Also, how do you transact through escrow in a way that’s completely above board? A lot of people own crypto in a decentralized manner. It means they could have $5 million worth of crypto that nobody knows about. And then when they go to buy a house, they come up against all types of anti-money laundering and Know Your Client laws. Not to mention that all parties need to know the origin of these funds.”

Tate agrees. “If someone is not dealing with an experienced professional who has experienced partners, it could literally kill a deal,” he says. “It’s key to make sure you’re dealing with the best of the best on both sides.”

With that said, it is important to choose a legit real estate agent, we have made a list of the most recommended real estate agencies to use with crypto.

International clients can benefit from cryptocurrency

As Kelczewski notes, cryptocurrency is generating wealth across the globe, minting new millionaires in parts of the world where stable, standardized banking may be a relative rarity. “I think agents who represent international clients will appreciate the ability of cryptocurrency to transfer and store value.”

When advising title companies, Tate is also quick to alert them to the benefits. “Once I show them that using crypto assets to fund real estate transactions is more secure than sending a wire—and eliminates 100% of wire fraud—it really gets their attention,” he says.

“Not to mention, crypto is borderless, so you don’t need to wait eight business days for an international wire and spend a lot of money transmitting it,” he adds. “I have overseen and helped facilitate a transaction where someone from Australia wired $143 million in crypto assets in a matter of 36 minutes to fund a commercial real estate transaction.”

Agents also need to be wise to the potential challenges. “Think about crypto as a stock, for example,” says Pane. “Today we might agree on 25 Bitcoin for the million-dollar property, but all of a sudden, Bitcoin goes up 30%, and now I should give you 19 Bitcoin. And so the challenge becomes, how do you lock in that rate and keep both sides happy through the closing?”

Conduct research, consult experts, and educate yourself

Speaking to experts and investors can help agents foster firsthand experience in the cryptocurrency space, as well as sites like coinmarketcap.com, viewed by many as the authoritative source on the value of the most credible coins.

Then, agents can start delving a little deeper into how crypto will continue to shape the industry. “In the not-too-distant future, the digitalization of real estate will occur, and at that point, I hypothesize crypto and web3 systems to become widely adopted,” predicts Kelczewski.

It may feel like a new frontier for many agents, but as cryptocurrency becomes mainstream, more and more clients will be asking about it. By gaining a strong foundational knowledge today, agents can continue to deliver great service and evolve to the changing needs of clients.

Article source: Inman.com

Image source: Envato