Lately there has been tremendous talk about the advancement of Bitcoin as a viable currency which may be possibly even used to purchase real estate in the future. Is purchasing real estate with Bitcoin possible? Bitcoin is already accepted by many web retailers including overstock.com and the NBA franchise the Sacramento Kings have also begun to accept the currency in order to purchase merchandise and tickets. Although the crypto-currency has been around for a few years it is only in its infancy when it comes to general public acceptance.
Over a month ago a New York based real estate firm suggested its willingness to accept Bitcoin for their real estate commissions. However, this does little good for a buyer who wants to move money into the US to purchase real estate or perhaps even a US citizen who is desiring to use his/her Bitcoin to purchase a NY City condominium. In reality the money must be accepted by either a NY Title Insurance company as a settlement provider or the attorney who is handling the disbursements for the underlying transaction.
Finally, Bitcoin and Manhattan real estate!
“…In what may be a first for a traditional real estate firm, Manhattan-based brokerage Bond New York has announced it will now accept Bitcoin as payment for real estate transactions.
“Bitcoin is a convenient and inexpensive way for our customers to transfer money, so we see it as a win-win situation which will impact the real estate industry,” said Noah Freedman, co-founder of Bond New York.
The brokerage said in a statement that it believes it’s the first brokerage to accept Bitcoin, and named a number of benefits for making the move. Echoing other Bitcoin adopters, the brokerage cited reduced or nonexistent processing fees as one draw of the currency. Bond New York said the currency also offered security undergirded by “military-grade cryptography,” “identify protection” and “fast international payments,” plus it “works anywhere, anytime.” (Source)
During the change of title, the buyers money floats through escrow typically held by the title insurance company except in states like NY where it is common for either the buyers attorney or bank attorney to handle the escrow and disbursements of the transaction. Either way, it is this party that moves the buyers money to the seller, the creditor who is being paid off if applicable, the county recorder of deeds and the tax collectors if taxes are being paid. In short, Bitcoin will only become available to a buyer if the title insurance provider or the attorney is willing to take the Bitcoin as a currency to close the transaction. The escrow agent for the transaction takes on the fiduciary duty to properly disburse all funds to the proper parties itemized on the HUD1 or settlement statement. The recent suggestions that a real estate broker is willing to take Bitcoin is a bit far fetched since this really doesn’t do the buyer any good.
Sellers of real estate and any involved real estate brokers involved in the transaction do not make any disbursements as they only receive commissions. As stated earlier buyers proceeds flow through the title insurance company or the attorneys escrow account. In essence if this party is not willing to accept Bitcoin the buyer is unable to use such to effectuate the transaction.
This is obviously a new facet to the currency world and it will evolve as time goes by and possible regulations are created. At this time it comes down to making sure the proper parties are in place to help you facilitate your real estate purchase. The good news is our NY Title Insurance company as well as our title insurance branches in other states have relationships with Bitcoin payment processors who understand the time sensitivity on the money side when it comes to purchasing real estate. It comes down to knowing how to get things done in a risk free and efficient matter and we have those parties as close partners and alliances of ours. As crypto-currency is in its infant stages we plan on continuing to put in place the proper partners to help us facilitate such transactions for you our client.
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About World Wide Land Transfer:
World Wide Land Transfer is a full service Settlement and Escrow Company also providing comprehensive title insurance services for all forms of real estate transactions ranging from a home purchase or refinance to the most complex commercial transaction. World Wide Land Transfer started predominantly as a PA Title Company in 2004 but grew quickly and started issuing NJ Title Insurance, NY Title Insurance, MD Title Insurance, VA Title Insurance and FL Title Insurance. World Wide now covers most counties throughout the nation.