Have you heard that people are now starting to buy property with Cryptocurrency? I have, but the truth is somewhere in between the rumors and the reality. There has been many conversations around cryptocurrency and block chain. To be clear, these are two very different things. Cryptocurrency, such as Bitcoin, are not yet acceptable forms of currency for purchasing real estate. Boom, I said it. Now let me back track. Have we handled a transaction where the client bought a piece of property with BITCOIN? If you ask the client they would say, “yes I have bought property with BITCOIN.” However, that is not truly the case. So how did it work? The client used an integration company to do the transaction. The client hired a company that works with all parties to be sure each one had gotten what they needed. At the title company I need good funds, which by definition at this time is a wire of Cashier’s check in USD (United States Dollars). I also need to be sure the proper transfer documents for the transfer of the property are recorded with the county recorder’s office. Most of the cryptocurrency companies use block chain to register the chain of ownership by way of committee report and registration with block chain. It is great if the owner wants to do that, but it is not required by the title company. It may be required by the integration company or the cryptocurrency company, but not by us. So now the picture is becoming more clear, right? Can you buy real estate with Cryptocurrency? In a sense yes, but it would involve layering the needs of the transaction to get you where you need to be. You may add three layers to the transaction by starting with cryptocurrency but it can be done.
Your escrow company will require USD for closing and any funds deposited to their escrow account. The title company will require that the transfer documents are handled in typical fashion and recorded with the county recorder. Your integration company will require someone to engage in a contract with them to handle the file. That would not be your escrow company, but either you, your agent or attorney would have to take charge. The integration company will have a system in which all the documentation they request will need to be uploaded to their secured database. They may require the use of block chain to register the transaction. So if you have been dying to know if you can buy your next investment property with you cryptocurrency, the answer is kind of, yes. Keep looking to the future and keep your options for investing open as always!
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By Dianna Jackman, VP/Escrow Operations Manager Chicago Title