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May 26, 2018
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As cryptocurrencies become more and more accepted as a method of payment, the value of the items being sold also increases. There are already a few ICOs being developed with the real estate market in mind, but stories of people selling their actual home for cryptocurrency are rare. Needless to say, this is most likely down to the fact that the market for cryptocurrencies is extremely volatile.
This could have disastrous implications if you are trying to sell a house worth all your savings and your pension. Some cryptocurrencies, like Bitcoin, are more legitimate than others, and are less likely to lose all their value in a short period of time. Although, as the crash of December 2017 showed us, not even the original cryptocurrency is immune to dramatic downturns. If you are thinking of selling you house for cryptocurrencies, here are a few thing you need to consider before doing it,
Assess the risks involved
As mentioned, there is the volatility of the market to consider. If you are going to sell your house for a cryptocurrency coin or token, you should consult a real estate lawyer who understands the world of cryptocurrencies. More importantly, as the seller of the house you should do your own rigorous research into the token which you are considering accepting as payment for your house.
You should understand the progress the token has made in terms of its value, and how stable it is. You should look into who the people in the team behind the token are, and if you trust their track record. Finally, it would always be a wise move to convert some of the cryptocurrency tokens you accept into fiat money just in case the value drops somewhere down the line.
Get a solid contract in place
When it comes to drafting up the contract for the sale of your house, it is crucial that you enlist a real estate attorney to help you out. Again, they should be knowledgable when it comes to the cryptocurrency world, and be very meticulous in their research as well. When it comes to determining the closing date for the contract, it will also be a good idea to account of the fluctuating value of the cryptocurrency the transaction is made with. Leaving a few weeks on either side of the closing date to assess the fluctuations will avoid you experiencing a sudden crash in value the moment the transaction is finalised.
Research the legal matters
Since cryptocurrencies is still a relatively new concept to most people, it is not all countries that have incorporated them into law. This means that even if you are happy with accepting cryptocurrencies as a method of payment, and using smart contracts in place of a traditional agreement, you need to check with the law first. Depending on where you are, you might have to have a traditional agreement with the value represented in fiat money drawn up. This ensures that if there is any lega trouble down the line, you have all your bases covered.
Your attorney might not accept cryptocurrencies
It can be tempting to just buy and sell everything in cryptocurrencies, but bear in mind that not everyone might share your enthusiasm. Legal firms will most likely want their salaries paid out in fiat money, so it is a good idea to check with them when making your plans. If you do manage to find a legal firm that accepts cryptocurrency then all the better. But always select your attorney based on their merit and skill, and not on whether they accept cryptocurrency tokens.
