San Francisco Chronicle - (Sunday)
Sound Off: Can Bitcoin be used for home sales?
A: How common? Not very.
Do I expect the role to expand? Absolutely.
There are a few important factors to know, acknowledge and accept. Bitcoin is the blue chip of the cryptocurrencies and it’s also extremely volatile. If this asset class survives, which I believe it will, bitcoin will most likely be the international crypto monetary standard. This is a big leap, as there are doubters. There are also many influential people who are believers and advocates including many in the tech industry here in San Francisco.
There have been a few transactions in the Bay Area, throughout the U.S. and abroad. Those who own a lot of bitcoin, whales as they are called, seek to diversify as the value increases. There are companies that offer services that involve exchanging bitcoin to U.S. dollars to complete the transaction.
We are in the early stages for sure. Just as the world is in the early stages of adopting a digital currency that has no borders, is decentralized, immutable and most likely can’t be legislated away. In some countries, bitcoin is already accepted as a legal viable currency.
As the asset class matures, I believe we will begin seeing asking prices stated in U.S. dollars and in bitcoin. There’s a long way to go, but in my view it’s coming. Frank Castaldini, Coldwell Banker,
415-846-1899, fc94114@aol.com. A: Cryptocurrency cannot be ignored as billions of dollars move through the blockchains. Yet, it is not for those who cannot afford a loss.
Vanguard agent Scott Morton represented a client in the purchase of a home with bitcoin profits. He notes, “Crypto millionaires seemed more prevalent when bitcoin was blowing up exponentially in value, but a lot of froth has let out of the market and it seems some investors are hoping to recoup some losses before cashing out.”
Investing in cryptocurrency is unstable, with little protection.
Buyers and investors are advised to go through five to six steps of identity protection including a separate email, a malware byte scanner, two-step verifications, and a protection PIN to keep out hackers.
Transactions are final. If the investor makes a mistake, there is no recourse.
Local companies are offering informative sessions such as “How to Increase Your Real Estate Sales Using Bitcoin on a Block Chain.”
Bay Area real estate financial forecaster Carole Rodoni is cautiously optimistic and predicts greater acceptance of cryptocurrency in the next few years.
I agree.
Anne Lawrence, Vanguard Propreties,
415-533-6980, annelawrence@vanguardsf.com. A: Cryptocurrency as an eligible asset for down payment and reserves in a real estate transaction is still in its infancy.
Until roughly six months ago, its mention in conventional lending guidelines was non-existent. In practical terms, lenders such as Fannie Mae and Freddie Mac now entertain it as a viable asset given parameters as such below:
As funds for real estate transactions, cryptocurrency, digital currencies or altcoins must be converted into U.S. currency, held within a U.S. financial institution and verified before approval.
In addition to this, borrower(s) must provide acceptable documentation for the source of funds used to initially acquire the cryptocurrency.
Given cryptocurrency’s stigma, the source of funds to acquire it needs to be legitimate. In relevant terms, it’s not a widely held asset class compared to traditional ones.
I expect cryptocurrency’s role to expand as lenders look at their risk tolerances and become more comfortable with the asset class as a whole.
John Dutra, Private Mortgage Advisors, 925-594-1920, jdutra@pmaloans.com.