The National Association of REALTORS® is the largest U.S. real estate trade group. Now, it has a Cryptocurrency Presidential Advisory Group. The reason? To learn and think about crypto in real estate — now, and in the future.
Leslie Rouda Smith, president of NAR, wrote in June:
I’m excited to tell you that I’ve appointed a presidential advisory group on cryptocurrency — a member-driven group of issue experts who will explore in detail the expected impact on consumers and on our profession.
The Cryptocurrency Presidential Advisory Group will make recommendations to the NAR president later in 2022. The idea is to guide the association and industry professionals into a new financial era.
Why Now?
President Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets in March 2022. The Order presses forward with a whole-of-government approach to synchronize the responsible development of cryptocurrencies. It’s a clear signal that the United States will support innovation in the world of digital assets.
In 2022, the word is out. The U.S. government has every intention of ensuring that blockchain innovations can safely flourish.
Is Real Estate Ready for Blockchain?
Blockchain is an unchangeable ledger that enables transactions and the tracking of assets. Based on this ledger, digital currency can be used to buy assets — including homes.
As intriguing as the idea is, most real estate agents have yet to seriously explore it. But now that NAR is officially interested, the learning and adoption curve can be expected to pick up rapidly.
Natalia Karayaneva, CEO of Propy, has recently joined NAR’s REACH accelerator initiative. Propy has handled more than $4 billion in blockchain-based real estate deals so far.
Where Are These Deals and What Do They Look Like?
A high-profile deal in Tampa demonstrated a transaction on blockchain, while enabling everyone involved to view the process in real time.
Deeds.com covered the Tampa blockchain condo auction here.
The process offered transparency. The condo appraisal, the bidding process… All steps were visible to participants in real time, online.
And while real estate agents might understandably think of digital assets as too volatile to work with, the Tampa condo deal highlighted the role of stablecoins (USDC, in this case). Digital currencies can be pegged to the U.S. dollar, holding their value in place.
If this still sounds murky, OK. Propy is ready to help explain things through its digital-era real estate courses. It’s already certified more than 1,000 U.S. real estate agents in cryptocurrency literacy.
How Can Real Estate—and People—Benefit?
The ability of cryptocurrency to avoid international red tape is a major boon in itself. So, cities with a lot of international buyers are experiencing this wave first.
But would ordinary people stand to benefit from applications of digital assets to real estate? Yes. And many ordinary people need a better system.
Today’s real estate transactions are slow, cumbersome, and paperwork-heavy. This is due to traditional underwriting procedures. And some people are locked out entirely because they don’t fit traditional borrower profiles. From the ordinary customer’s point of view, there’s lots of room for improvement.
The use of digital assets could actually make owning a home possible for many people. Today, there are lending companies willing to extend loans to people with bitcoin assets. These same customers may have been denied a traditional mortgage because of their nonstandard income, asset, and credit profiles. Cryptocurrency buyers stand to gain new pathways to financial empowerment.
Fewer Cons, More Pros
Granted, lenders will charge higher interest rates where digital assets are involved. Fees at crypto exchanges can be substantial, too.
But for some real estate sellers and buyers, the premiums will be worth it. And doing business in crypto is likely to become easier and less costly as the digital era unfolds.
And it looks like the digital era is unfolding every bit as quickly as we’d anticipated.
Supporting References
Lee Nelson for REALTOR® Magazine: Feature Article – How Blockchain and Cryptocurrency Are Influencing the Real Estate Market (Jun. 28, 2022).
Leslie Rouda Smith for the National Association of REALTORS®: Uncertainty’s Silver Lining – Commercial Real Estate Is Often an Act of Reinvention (Jun. 17, 2022).
Photo credit: Mart Production, via Pexels.