Few people are unfamiliar with the rise of Bitcoin and other forms of cryptocurrency. It’s likely you’ve heard about Bitcoin, but you might not be aware that it has become a more trusted and popular way of transacting business. If you plan to buy or sell Livermore real estate, you could gain numerous benefits from using this or other types of cryptocurrency to conduct your transaction. Here is what you should know about Bitcoin and how it can be used for your real estate purchase or sale.
What is Bitcoin?
Created in 2009, Bitcoin is an internet-based type of currency that allows two parties to conduct a transaction with no intermediary, such as a bank. When you purchase bitcoins, you can use them to buy merchandise, book hotels, pay for services, and yes, even buy Livermore homes for sale. Cryptocurrency like Bitcoin has received the most press about how to get rich by trading it, but it can also be used as a no-hassle form of currency.
But Bitcoin has also gotten some bad press in the past, mostly because transactions are completed anonymously and it can theoretically be used for illegal purposes. Its reputation has improved over the past few years as those who have used it have realized that it is an easy and relatively inexpensive way to make international payments as bitcoins are not subject to any country’s regulation. There are also no fees involved with Bitcoin transactions, so many small business owners are turning to this form of payment instead of using credit cards. Bitcoin as an investment is also still popular as many believe its value will continue to rise.
How do you use Bitcoin to buy real estate?
Because Bitcoin can be used as currency for a transaction between any two parties, it can be successfully used to purchase Livermore real estate. Anyone who uses Bitcoin has an anonymous address and is able to use blockchain technology — a database that is shared by a community and is in numerous locations at the same time — to buy or sell products, services, or property. There is no central location for Bitcoin, meaning it is very difficult for hackers to compromise the system. This is one of a number of reasons why more people are turning to Bitcoin and other forms of cryptocurrency to make safe and secure transactions.
When using Bitcoin to buy Livermore homes for sale or purchasing commercial property in the area, you just need to buy bitcoins and then find a seller who is willing and able to accept it as a payment option. After this agreement has been made, locate an escrow provider, broker, and insurance company that can support your Bitcoin transaction. It’s been a challenge in the past to find many professionals who will accept Bitcoin, but the cryptocurrency is gaining in popularity, and options are becoming more widely available.
The benefits of using Bitcoin to buy real estate
There are multiple reasons why homebuyers and investors are using Bitcoin and other forms of cryptocurrency to make purchases. The most common include:
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Reduced fees. There are no intermediaries in a Bitcoin transaction. Because the payment is made directly from the buyer to the seller, all fees can be kept to a minimum. This makes a Bitcoin transaction more streamlined and less expensive than more traditional real estate processes.
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It’s fast. The Bitcoin transaction process can take as little as ten minutes once all the necessary paperwork has been signed by the parties involved. There is no need for sellers and buyers to wait on banks or any other third parties, and all parties are paid simultaneously.
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There is less volatility. One of the drawbacks of investing in Bitcoin is the volatility of the cryptocurrency. Prices of Bitcoin dip and rise unpredictably, but when investors use their cryptocurrency to buy homes for sale, they reduce that volatility and diversify their assets.
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Negotiating power. Once you have a seller who is willing to accept Bitcoin, you will likely have more negotiating power than a buyer who has more limited options to make the real estate purchase. To harness this power, look for sellers who promote the fact that they accept Bitcoin so you can directly approach them about properties you are interested in buying using cryptocurrency.
The drawbacks of using Bitcoin to buy real estate
Of course, there are some negative aspects to using Bitcoin and other types of cryptocurrency to make real estate purchases. Though there are plenty of advantages associated with Bitcoin, some of the drawbacks include:
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Tax uncertainties. Cryptocurrency is new and unregulated, which can make your tax situation confusing. Trading, spending, or exchanging Bitcoin is usually viewed as a capital gain, and you will be required to pay taxes on it. If you plan to use Bitcoin to buy Miami real estate, it’s best to work with a CPA who has experience with cryptocurrency and who can guide you through the process.
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Lost opportunity for appreciation. If you have invested in Bitcoin as an investment, you no doubt have done so in the hopes that its value will rise. If you spend your bitcoins on Livermore homes for sale, the value of your investment is gone, and you will no longer benefit from a rise in value.
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Transactions are not reversible. If you plan to use Bitcoin to buy Miami real estate, you must have absolute trust in the seller as you cannot reverse the transaction unless both parties agree. If only one requests a reversal and the other refuses, the deal will not go through.
Interested in learning more about Bitcoin or using it to make your next real estate purchase? Gerada Stocking can help you determine your next steps and get assistance in finding or building residential or commercial properties.
