WE DID IT!!! Helped my friend purchase a home using Ethereum!
1. They did not want to convert Ethereum to Cash for the purchase to avoid the additional taxes from trading, that felt like a waste of money right off the bat, so it was important to purchase using the Ethereum directly.
2. We transferred the Ethereum to an escrow service instead of directly to the seller of the house to ensure security of the funds until all terms of the sale were completed. Yes, it took a while to find an escrow service that accepts cryptocurrency in general. Escrow service was also used due to cryptocurrency price volatility, with a clause we agreed upon with the seller that we’ll work together on large price changes. Our agreement was, a decrease of 10% or greater we would value the cryptocurrency at 5% less than the current value we had written in the contract. Similarly for an increase of 10% or greater, we would value the cryptocurrency at 5% more than the value we agreed upon in the contract. Also, the escrow service fees and transaction fees were split 50% between the buyer and seller.
3. We also had to find a seller that will accept Ethereum which limited our options, but WE DID IT! So some sites like Zillow allow listing your home for sale for cryptocurrency, but whether they did or not, we asked all the sellers of the homes if they would consider a sale in cryptocurrency.
4. No, we did not use NFTs, just Ethereum. We were talking about creating a NFT for the sale for years, but it just didn’t feel worth the time when it came time to move forward with buying the home. It would’ve just been a cool keepsake for my friend, but not a real digital asset of a title or anything haha. We are still talking about how NFT titles would be awesome if it was more accessible and streamlined in the future.
5. No, they did not need a loan, so that simplified this process since we didn’t have to wait for confirmation from the mortgage lender etc, it was just between us and the seller and escrow service.
It was scary seeing so much Ethereum being moved in person. I only see posts about large amounts being moved, but we got sweaty seeing it in real life. Yes, we definitely did a test transaction and quadruple checked the wallet addresses!
If you have any questions, feel free to ask, will try my best to answer all the questions!
Posted by bzzking
8 Comments
An amazing story!!
Congrats to the new home owner!
What was the Escrow service fee?
Was it done on Ethereum Mainnet or an L2?
!tip 100
!pow
Exchanging cryptocurrency for property is a taxable event (assuming you are in the US.)
Your friend likely wasted a huge amount of money on the escrow service and from limiting their market to only sellers willing to accept cryptocurrency.
So congratulations, I’m picturing the biting the bronze medal meme for you, never give up on the dream of pointlessly spending crypto on goods and services when cash is easier!
Did you have to pay capital gains tax on the ETH ? I’m assuming you had the ETH while it was cheap
Really?
They didnt pressure you about how you aquired the funds like my lender did?
Maybe its because you brought it in eth and i did mine on loan and was showing how much assets i have.
Why not borrow against eth and use that. Borrow is not taxed
How much did your friend end up having to pay in capital gains??
Are u buying back in again?
All sounds like crypto companies pushing sale/purchase tactic s using crypto….