From Super Bowl commercials to reporting cryptocurrency purchases on your taxes, it’s becoming clear that cryptocurrency is becoming a mainstream phenomenon. While there are certainly still those who prefer not to invest in cryptocurrency, it’s undeniable that there are people who prefer its portability, security, and lack of a middleman in the form of a bank or other institution.
But when it comes to real estate transactions, how does the housing market stand to shift if cryptocurrency continues to grow in power and influence? Well, a few different ways! Here are just some of the intriguing possibilities of how crypto could influence real estate.
Crypto as a Payment Method
While fiat currency, or the typical currency of a country, is still the norm for most real estate transactions, it is entirely possible that both sellers and buyers could benefit from listing a price in dollars and a price in one of the more popular cryptocurrencies, like bitcoin or Ethereum. These currencies are indeed volatile, but they are also a major holding of plenty of people, including those who are looking to buy a home. Making the buyer exchange bitcoin for dollars, for instance, locks their bitcoin value to that day’s exchange rate, but buying directly in bitcoin avoids that volatile approach. It stands to reason that buyers and sellers who are looking to cater to a crypto audience may offer or price in more than one currency in the future.
Crypto for Person-to-Person Transactions
Cryptocurrency is built on a ledger concept, where essentially a large variety of computer systems ‘witness’ each transaction so that there is a non-personal record that is constantly verified as accurate. These transactions are secure even without a bank or other lender making them so, and hacking ledgers is essentially impoosible. For this reason, future real estate purchases could happen with crypto, since the ledger verifies the money is paid and could take the place of escrow accounts, legal verifications, and other roles that typically add administrative costs to the purchase of a home.
Realizing the Human Element: What Do Homeowners Need?
Cryptocurrency and its parent tech the blockchain both hold exciting potential for the future of real estate transactions. That being said, the wisdom and knowledge of real estate agents isn’t baked into the blockchain. So as agents consider a crypto-connected future, they are focused on building the strengths that they bring to the table: homeowners need someone who is truly in tune with pricing, value, and market conditions in a very small swathe of whatever town or city where they work.
They need someone who can coordinate, compromise, and be diplomatic when seller and buyer are hashing out the details. Fundamentally, it’s good for everyone if some portion of commission or fees gets shaved off and no one has to handle the bureaucracy and paperwork any more, all while keeping the real estate transaction clear and secure. But agents do have to reposition themselves if this future bears out, since every market shake-up leaves professionals showcasing what it is they bring to the table, just as robo-advisors did for traditional financial advisors. It’s possible to demonstrate value, but you have to be ready to do so!