This Hamptons home can be yours for $799,000, or 1,445 in Bitcoin … wait, that’s 1,444 in Bitcoin … no, it’s 1,445. Yeah, 1,445.
While the value of Bitcoin, an alternative currency launched in 2009, is still wildly fluctuating, the novelty isn’t.
But this listing, a Southampton, NY, cottage owned by Phillip Preuss, isn’t the only property where the owners are testing the waters with alternative currency. Take this mansion in Las Vegas’ exclusive Spanish Trail neighborhood, which is marketed for $7.85 million, or 14,190 in Bitcoin.
So, is this a marketing ploy, or do these sellers really think that accepting payment in alternative currency will get them the buyer they seek? From the WSJ story:
“There might be international buyers, or a younger computer whiz who came into a little bit of coin overnight,” says Mr. Preuss, who is 42 and originally from Germany. “I’m expanding my buyer base.” Mr. Preuss, who works in international equity sales, has a small investment in the currency, having purchased about $100 worth of bitcoin in June, an investment that has appreciated significantly since then.
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Because a bank is not involved, fees for bitcoin transactions can have fewer fees than traditional bank transactions, which Mr. Preuss says he also found appealing. With no underlying mortgage on the home, Mr. Preuss says he’d most likely hold onto the bitcoin if someone were to use the virtual currency to purchase his home. “I believe in the longevity of bitcoins,” he says.
It remains to be seen whether bitcoin sales will take off in real estate.
“I think at this point it’s nothing more than a marketing technique of getting eyeballs to a website, which can help sell a property,” says Jonathan Miller, president of appraisal firm Miller Samuel. “I don’t take this very seriously, but it certainly catches your attention.”
And this from the Las Vegas Review-Journal:
“The advantage is that we’re expanding our market and adding some notoriety,” said [homeowner Jack] Sommer, who’s looking to downsize now that his seven kids are grown and have moved out.
[Bitcoin merchant Julian] Tosh agreed that bitcoin could open Sommer’s home to a global audience.
“There are a bunch of people who have bitcoins, and they’re dying for a place to spend it,” he said. “If you increase awareness of potential buyers, you could tap into new markets.”
I am more likely to agree with the appraiser, Jonathan Miller, who considers it a marketing technique. But in the long-run, I’m really interested to see what the implications are when you buy a home with Bitcoin. Will that affect appraisals? Credit history?
What are your thoughts?
News last week was a little mixed, but now that New York Fed chair William Dudley has retired, the impact of his departure is being felt throughout the market. However, a new report from the Mortgage Bankers Association shows good news for our strong market — home purchase applications are posting gains.
