Marco Schlesser - Using Digital Currencies for Real Estate
The options available for buying real estate in Hawai’i are ever expanding. Yes, there are many financing options such as the traditional 30-year mortgage, either fixed or adjustable. Commercial financing is also available providing lines of credit. Private party lenders are an option as well when qualifying is a challenge. We can now add the use of Crypto Currencies to the list of buying options.
That’s right! Buyers can use digital currency, and the Sellers receive cash! But how?
I was honored to sit down with Wendy Bond, President and CEO of Guaranty Escrow Inc., to provide an in-depth look at how crypto can be used to successfully purchase real estate.
Wendy explained that making your offer can be a little tricky if you don’t have the tools in place to see the transaction through to successful closing. Not unlike working with a good mortgage professional when borrowing for your purchase, her crypto team knows all the steps to assure the offer is as solid as possible. And the Seller does not need to understand crypto currency or receive crypto currency.
The first step is for the Buyer to speak with the team at Guaranty Escrow, Inc. to determine the important details of the transaction. These details include the purchase price, the timing for closing and the type of crypto currency the Buyer wishes to use. Wendy and her team then jump into action to help the Buyer select the best method for converting their digital currency into U.S. Dollars. Wendy and her team help the Buyer choose the best method for converting their currency. This process takes a little time, so the earlier in the conversation that Guaranty Escrow gets involved, the better.
The next step is for the Buyer to provide the details about themselves and the currency they will use in order for Wendy and her team to process the Buyer through the “K-Y-C” process. K-Y-C stands for “Know Your Customer”. This process may be viewed similarly to the underwriting stage when obtaining conventional financing, although much quicker and with less hassle. Wendy and her team are dedicated to the thorough and complete review of the Buyer and their ability to complete the transaction with digital currency. There are many facets of this review, part of which is determining the value of the Buyer’s currency. The process also confirms the manner in which a Buyer acquired the digital currency was through legal means and not from illicit or illegal activities.
Guaranty Escrow, Inc. sets up a Holding Escrow for the benefit of the Buyer. The Holding Escrow is separate from the primary escrow for the purchase, which at this stage may or may not already be opened and active. The Guaranty Team acts as a merchant or vendor, creating invoicing for submission to one of the many digital currency exchange organizations Guaranty Escrow is approved with. These currency exchange companies include Bitpay, ForumPay and Crypto.com. Very few if any other escrow companies, nationwide, have gone through the vetting process required by the exchanges, to become a qualified vendor/merchant.
Now that the Buyer has been cleared through K-Y-C, and Guaranty Escrow, Inc. has confirmed all primary escrow details, Guaranty Escrow, Inc. can then prepare an invoice for the amount of funds the Buyer needs to place into escrow for the cash required to close escrow. The Buyer is involved in these steps and kept aware of the timing at every step of the process. Once Guaranty Escrow, Inc. sends the invoice through the currency exchange chosen by the Buyer, the Buyer will receive notification of the request for funds. The Buyer then approves the request, verifies authorization to send the funds to Guaranty, and voilà ! A wire transfer is sent from the exchange company directly to Guaranty Escrow, Inc.. The Buyer can now show proof of funds to the Seller and Listing Agents verifying the Buyers ability to close escrow as promised.
Guaranty Escrow strongly encourages Buyers to begin the process described above even prior to making an offer on a new listing. This places the Buyer is a very strong position allowing proof of funds held in an escrow account in the Buyer’s name. In this case, there is no need for the Seller to have concerns about a Buyer’s ability to convert the digital currency to dollars for the purpose of the real estate escrow.
Guaranty Escrow, Inc. will always stay in close communication with the primary settlement agent, whether a title company, attorney or escrow company located anywhere in the United States. Guaranty Escrow, Inc. has closed over $20,000,000 in real estate purchase transactions nationwide and has become the Gold Standard for facilitating real estate purchases using digital currencies.
For more information on how to buy property with digital currencies in Honolulu and on O’ahu, contact Marco Schlesser, Realtor-Associate.