Real Estate Meets Cryptocurrency: What REALTORS® Need to Know

This article includes information adapted from the National Association of REALTORS®’ Window to the Law video titled “Cryptoscam Targets Real Estate Professionals,” as well as resources from the IRS, FinCEN, and The CE Shop.

As cryptocurrency continues gaining traction in mainstream finance, a growing number of real estate professionals—including here in West Michigan—are encountering buyers who want to use Bitcoin or other digital currencies to purchase property.

One local agent recently shared a story about a buyer interested in a multimillion-dollar waterfront property. The buyer claimed to hold all assets in a “decentralized wallet” rather than a traditional bank account. The inquiry raised red flags—and important questions about how REALTORS® should approach crypto-financed deals.

Understanding Cryptocurrency in Real Estate

Cryptocurrency is a digital asset stored on a blockchain network. While it can be used to purchase goods or services, including real estate, most transactions still require converting crypto to U.S. dollars before closing.

What is a Decentralized Wallet?

A decentralized wallet (or non-custodial wallet) is a type of digital wallet that allows users to store and manage their crypto assets independently—without using a bank or centralized exchange. Only the user has access to their private keys, meaning they control their funds entirely. Common types include hardware wallets (like Ledger or Trezor) or software wallets (like MetaMask or Trust Wallet).

Because these wallets are not tied to a financial institution, the assets held in them are not insured by FDIC (Federal Deposit Insurance Corporation), NCUA (National Credit Union Administration), nor any other government agency. If funds are lost—due to hacking, fraud, or forgotten passwords—they’re gone for good.

What’s the Catch?

Cryptocurrency isn’t illegal, but it’s highly volatile and unregulated. Most escrow companies, title insurers, and lenders do not accept crypto directly and require full conversion to U.S. dollars before closing.

NAR is actively tracking this trend and warns of increasing fraud attempts involving fake crypto wealth and phishing scams. In a recent Window to the Law video, NAR highlights a rising scam where fraudulent “buyers” attempt to lure REALTORS® into bogus investments after building rapport.

🛑 Watch NAR’s alert: Cryptoscam Targets Real Estate Professionals

No Preapprovals Using Cryptocurrency

Because cryptocurrency isn’t backed by a traditional financial institution or regulated lender, there are:

  • No mortgage-style pre-approval letters
  • No standard financial verification like you’d get from a bank or credit union
  • No guarantee of liquidity (until the crypto is successfully converted into U.S. dollars)

Buyers may say they’re ready to buy with Bitcoin, but unless the crypto is liquidated and deposited into a U.S. bank account, those funds aren’t usable for earnest money or closing.

What You Can and Should Request from Crypto Buyers:

Instead of a preapproval, ask for:

✅ Wallet Balance Proof
A screenshot or link to a public blockchain explorer (e.g., Etherscan or Blockchain.com) showing the current wallet holdings.

✅ Conversion History or Capacity
Evidence that the buyer has successfully converted crypto into U.S. dollars before—or can do so. This could be screenshots of previous transactions or documentation from a crypto exchange account (e.g., Kraken, Coinbase).

✅ Conversion Timeline
A realistic understanding of how long it will take the buyer to cash out the crypto. Depending on volume, tax implications, and the exchange used, this can take days or even weeks.

✅ Bank Transfer Confirmation (for escrow)
Ultimately, title companies will require earnest money and closing funds in U.S. dollars, typically via wire or certified funds.

Until the crypto is converted and deposited, it’s not truly “ready.”

What REALTORS® Should Expect

Buyers may ask to use crypto directly in a transaction, but in practice:

  • Most title and escrow companies won’t accept crypto directly
  • Buyers must convert their crypto to U.S. dollars before closing
  • Cash deals are the norm, since lenders can’t underwrite based on digital assets

Where to Learn More

For agents interested in understanding this space and protecting themselves (and their clients), we recommend these trusted resources:

Legal and Tax Considerations

The IRS treats cryptocurrency as property, meaning transactions can result in capital gains or losses. Both agents and clients must be aware of capital gains tax implications. IRS Virtual Currency FAQ

FinCEN Compliance: Large or suspicious digital transactions may fall under anti-money laundering (AML) rules. FinCEN Guidance on Convertible Virtual Currency

Cryptocurrency is here to stay—but its role in real estate is still evolving. REALTORS® should approach crypto transactions with caution, curiosity, and compliance. Ask the right questions, consult your title and legal partners, and stay informed as this space continues to develop.

Sources and Acknowledgments:
This article includes guidance from the National Association of REALTORS®, the IRS, the Financial Crimes Enforcement Network (FinCEN), and The CE Shop. For more information, please visit the official resources linked throughout.

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