Ask people about using cryptocurrency in the smoking hot real estate market and the answers vary wildly.
Using crypto to buy real estate, on paper and in theory, isn’t much different than other forms of currency, according to a June 16 blog post from Florida Realtors. The key, states the post from Florida’s leading advocacy organization for Realtors, written by financial news firm Benzinga, is in crypto real estate “money doesn’t move between banks, it moves between crypto wallets.”
Easy to say, but potentially complicated in practice. “Timing can play a critical role,” real estate investor and educator Paul Lizell says in the Benzinga story. “If you send the funds in a volatile market, you could actually lose value against the U.S. dollar if the crypto market is going up. Also, if you use a crypto like Ethereum, you could pay high fees ranging in the thousands.”
Lizell is apparently OK with the potential hiccups. Last August, he says he used $100,000 worth of Bitcoin as a down payment toward the purchase of a home in Naples. The transaction was handled by Bitpay, which converted the Bitcoin to U.S. dollars in real time, reports Benzinga.
Then there’s Denis Smykalov, with Wolsen Real Estate in Sunny Isles Beach, outside Miami. His firm has conducted multiple real estate transactions using cryptocurrency, the post states, which fits, given Miami is a national crypto hotbed. “Crypto transactions are not as complicated as they seem, especially if you are working with an experienced seller,” he says. “As it becomes a more accepted form of payment, you will find more companies willing to share the steps to open a wallet.”
That market experience, anecdotally at least, leads to more mixed reviews on the crypto real estate trend.
Consider Jamie Chang. A Naples-based real estate advisor with Premier Sotheby’s International Realty, Chang is all-in on crypto. She recently partnered with a Southwest Florida artist to create an NFT (non-fungible token) under the theme “Elegance from Within” to market a Naples condo listing. The piece is both a physical piece of art and a digital NFT.
The marketing technique, for a condo at the tony Kalea Bay community, worked, says Chang. It drew in a wider pool of buyers and beyond that, the ultimate buyer — who paid $3.1 million for the property in May — initially offered to pay for the condo in crypto. The seller balked at crypto, instead taking old-fashioned money.
The experience further convinced Chang, 40, that crypto, is a big part of the future of how real estate will be bought and sold in Southwest Florida. “Folks here are getting a little hipper, a little younger,” says Chang, who invests in crypto with her husband.
On the flip side is St. Pete Beach-based Amy Heckler, lead broker of Heckler Realty Group. Heckler was the listing agent for a house in Gulfport, Pinellas County that sold for 210 Ethereum at an NFT auction Feb 10. That translated at the time to about $632,000; when the sale was complete, the buyer instantly received ownership of the physical house — not the NFT.
The sale was labeled the first-ever NFT-based residential real estate deal in the U.S. Yet Heckler says first didn’t mean fabulous.
The negotiation process was haphazard, she says, and working with third parties in crypto real estate was challenging. And notably, the seller, cryptocurrency entrepreneur Leslie Alessandra, who co-founded DeFi Unlimited, got less than she could have for the home. “We had cash offers that were higher” by as much as $100,000, says Heckler, forgoing some 15% of the sale price.
While Heckler and Chang have had different experiences, so far, in crypto real estate, they are together on the frontlines of what seems to be a barreling train. For one, more and more potential homebuyers seeking to move to Florida’s west coast are coming from the Northeast and California, places where people are mostly more comfortable with crypto.
And there are other examples of crypto creeping into real estate, in the region and statewide. In Sarasota, the developer behind a $25 million waterfront estate currently under construction says he’s willing to “entertain offers for the property in Bitcoin,” according to a statement from Coldwell Banker Realty, whose agent, Rinat Sikdar, has the listing. As of late June, the agent had received offers, but none in Bitcoin, says a Coldwell Banker spokesperson.
Further up the crypto trail, and further north in Florida, in Ocala, there’s an example of a five-acre estate bought with Ethereum. The six-bedroom, four-and-a-half-bath residence, on lush acreage in an equine-friendly gated community, sold for $999,999, or 74.6 Ethereum, in late March. The listing agent was Tasha Osbourne of the Southeast Orlando office of Premier Sotheby’s International Realty. (The difference in Ethereum value between the Gulfport sale and the Ocala sale, in some six weeks, proves how volatile crypto real estate can be.)
In a statement after the sale, Osbourne summed up the push and pull of the fledgling trend. “The sale,” she says, “presented a challenging feat as crypto real estate transactions are just beginning to gain momentum.”