Buyers and investors will soon have an option to pay by multiple cryptocurrencies for several real estate development projects located in Kitsap County.
Harbor Custom Development Inc., a Gig Harbor-based real estate company, announced it will accept Bitcoin and some other cryptocurrencies as payment for buyers who purchase the company’s real estate assets in Washington state, including its projects in Kitsap County, beginning Jan. 24.
Cryptocurrency is a type of digital currency in which transactions are maintained and recorded by a decentralized system written in computer codes.
Harbor Custom Development Inc. will also accept digital currencies as payment for its projects in California, Texas, and Florida after Jan. 24. Homebuyers or investors who are interested can contact the project’s listing broker, and the broker will walk them through the purchasing process, according to the company.
“Acceptance of digital currencies for our real estate offerings is a logical step for Harbor and demonstrates our flexible business model that separates us from our industry peers,” Harbor’s Chief Operating Officer Jeff Habersetzer said in a statement released in December.
Harbor Custom Development has six projects on Kitsap Peninsula. In Bremerton, the company is developing the Soundview Estates (25 homes), Mill’s Crossing (36 townhome apartments) and Broadmoor Commons (32 townhome apartments). In Port Orchard, the company is planning the Bridgeview Apartments in Port Orchard (138 units). In Poulsbo, plans for Westry Village (66 townhomes) are underway, and in Belfair, the Olympic Sunset View Apartment Project in Belfair (226 units) is planned.
Payment by cryptocurrencies will be available for buyers, but not for rental payments, the company said.
Like a cash transaction
“The process will look very similar to a standard cash real estate transaction,” Jennifer Lang, the director of marketing at Harbor Custom Development, said in an email.
A buyer will work with the company’s listing agent to write up a purchase and sale agreement. Once the agreement has been accepted by both parties, the contract will be sent to an escrow company that Harbor Custom Development partners with, Lang said.
The escrow company would convert the digital currencies paid by the buyer into U.S. dollars. Once the transfer of funds is completed and confirmed by the escrow company, funds are wired to the seller and the buyer would own the property, Lang said.
There are transaction fees that a customer needs to pay in the process. The amounts of the fees are specific to each project, according to Lang.
According to the Internal Revenue Service, virtual currency transactions are taxable by law, and taxpayers undertaking transactions in virtual currency may have to report them on their tax returns.
Harbor Customer Development anticipates cryptocurrency buyers could be first-time homebuyers searching for a starter condominium, move-up buyers needing more space for their family, luxury homebuyers, or Institutional investors looking for large tracks of entitled land, developed lots or multifamily projects, according to Lang.
Besides Bitcoin, which is the first and most well-known cryptocurrency in the world, launched in 2009, the development company plans to accept 12 other cryptocurrencies: Ethereum, USD Coin, XRP, Dogecoin, SHIBA INU, Binance USD, Wrapped Bitcoin, Litecoin, Dai, Bitcoin Cash, Pax Dollar and Gemini Dollar, according to the statement.
Prior to Jan. 24, the company may add or subtract certain digital currencies from the list based on market conditions, according to the statement.
The market capitalization — which is the total market value of a cryptocurrency’s supply circulating in the market — of the 13 cryptocurrencies falls between $787.8 billion of Bitcoin and $164.7 million of Gemini Dollar as of Jan. 7, according to CoinMarketCap, a website that provides cryptocurrency-related data and analysis founded in 2013.
According to Seattle Times, the first real estate transaction that involved cryptocurrency in the Seattle area is believed to have occurred in 2018, when a 23-year-old design engineer bought a three-bedroom house in Tukwila using a combination of several cryptocurrencies for the 10% down payment. The cryptocurrencies were converted to U.S. dollars to pay the seller.
In other states, such as Florida, Texas, and New York, and other countries, cryptocurrency-involved real estate transactions have made headlines in recent years.
Kitsap Sun is interested to hear from Kitsap residents who list or buy a real estate property with cryptocurrencies. Please reach out to breaking news reporter Peiyu Lin at email@example.com or on Twitter @peiyulintw if you have any tips regarding the issue.