“Can you accept crypto?,” a client asked Denis Smykalov, broker/owner of Wolsen Real Estate in Miami. Smykalov had two options. He could say no and lose business. Or, he could say yes — even though he didn’t quite understand the process — and figure it out.
“I heard about crypto in 2018. Back then, I tried to do a crypto transaction, but when I approached the seller and asked if they would accept crypto, they said, ‘No.’ But after a few years, when crypto was on the rise, I did my first transaction with a client who purchased a condo, and he paid with crypto.”
Denis Smykalov became an agent in Miami in 2012. Since then, he gained a reputation across the industry for his transactions in cryptocurrency.
Smykalov is a self-described early adopter of technology. He was using DocuSign while colleagues were still asking to fax documents. Now, he is completing sales in cryptocurrency while some question the currency’s legitimacy and legality, some 15%-20% of his business, he says.
Despite the fall in value, cryptocurrency like Bitcoin is still being used for real estate, especially with buyers from Europe, Latin America, Russia and Ukraine, all countries with buyers and investors with whom Smykalov has worked.
If your buyer or seller wants to use cryptocurrency in a transaction, and you don’t have the experience, Smykalov has two pieces of advice.
Don’t panic, it’s not that difficult
“Even if you don’t know anything about cryptocurrency, you can still make a sale. You don’t have to be a professional,” said Smykalov.
According to Smykalov, there is no difference between a crypto transaction and a regular transaction. It simply changes one step, out of the ten steps a regular transaction takes. And, there are professionals out there who can walk you through the process.
Find an attorney
An attorney that specializes in cryptocurrency transactions is ideal for buyers and sellers working in cryptocurrency. Not only does Smykalov say an attorney will walk a first-timer through the process, but they will be essential every time an agent makes a sale in cryptocurrency.
“Don’t be afraid to learn about cryptocurrency, it is not rocket science,” said Smykalov.
By following these two steps, staying clam and working with the right attorneys, Smykalov has managed to close several cryptocurrency-based sales including a resale at Marina Blue for $465,000, pre-construction at Waldorf Astoria for over $2.5 million and a villa sale on Hibiscus Island for $19 million.
Two types of transactions
“There are two different types of transactions. You can buy with crypto if the seller accepts it and simply transfer the crypto to an attorney’s escrow wallet,” he says. In many cases, buyers will exchange Bitcoin, for example, for Stablecoin, which is a 1:1 with the U.S. dollar.
“Or, the crypto can be converted into U.S. dollars. For the sellers, there is no difference. It is like a regular transaction,” said Smykalov.
From Smykalov’s perspective, cryptocurrency transactions are going to become more popular across the country. That means more agents could be getting the same call he did, and they will have a decision to make. “It will always be in the big cities, because big cities attract people from all around the world. In my opinion, crypto will go more mainstream. Maybe it is going to take 20 years, but as long as the currency becomes more regulated it will go more mainstream.”
While the cryptocurrency market fluctuates every few years, it may scare off those who are in the game for a quick cash out. Meanwhile, investors who have knowledge of the industry will understand how to leverage their investments, and they may be interested in purchasing real estate using cryptocurrency. As an added bonus, mortgage rates don’t affect cryptocurrency transactions. So, in a market like this one — with rising interest rates — all-cash buyers could become crypto buyers.
As a veteran or up-and-coming agent, being confident enough to take on these clients could give you an edge in a competitive market.