Philadelphia’s first condominiums available for purchase in bitcoin will have their first open house today in the city’s historic Manayunk district. Susanna Kunkel, a veteran Philadelphia realtor, arranged the bitcoin offering as a way to entice tech-savvy, entrepreneurial-oriented buyers who are an important customer for modern urban condominiums.
The four condos from Falcon Condominiums range in size from 2,024 to 2,293 square feet of interior space. The initial asking price for each is 795 bitcoin.
Manayunk, a National Historic District, is a commercial neighborhood teaming with renovated Victorian storefronts located 15 minutes from Center City Philadelphia, King of Prussia, Chestnut Hill, and The Main Line.
Charting New Waters
“I’m really charting new water here,” Kunkel told CCN. “I just don’t think that (bitcoin) has been offered to our technology community as an option. Philadelphia has a growing presence of creative startup companies. As a realtor, I need to be in touch with our different communities and the trends.”
The condos, newly-constructed on the site of a former Polish social hall, has been on the market for one year. Kunkel recently came up with the idea of offering the four units for sale in bitcoin and suggested it to the property’s owners, who welcomed the idea.
The units are well suited to bitcoin-oriented buyers, Kunkel said. The condos have a flexible floor plan that can be used for work and as a meeting space that can accommodate 10 to 15 people. Kunkel envisions an entrepreneur who wants to work out of their home.
She said there have been private condo sales paid in bitcoin in Philadelphia, but this is the first publicly-listed offering. “It is the first mainstream, full-service offering in bitcoin,” she said.
Kunkel has promoted the offering on her blog and through social media. Phillymag.com, Philadelphia Magazine’s website, ran an article about it on Thursday. Kunkel has since received inquiries but no offers as of this report.
The property’s listing by phillyliving.com and on the multiple listing service does not carry the bitcoin price, only the dollar price. The prices for the four units range from $365,000 to $395,000. If a buyer makes an offer in bitcoin, the bitcoin amount will be based on the bitcoin-to-dollar exchange rate at the time of the offer. The amount may need to be adjusted when the transaction closes based on any change in the exchange rate.
“The seller is not going to take on the risk of bitcoin (price) fluctuating,” Kunkel said.
To complete a title transfer where funds are held in escrow, the party holding funds in escrow must be willing to accept bitcoin. Kunkel’s blog directs prospective buyers to an explanation by the title company that will handle the settlement, World Wide Land Transfer.
During the change of title, the buyer’s money floats through escrow usually held by a title insurance company, except in states like New York where it is common for either the buyer’s attorney or a bank attorney to handle the escrow. Either way, this party moves the buyer’s money to the seller, the creditor who is being paid off if applicable, the government recorder of deeds, and the tax agencies if taxes are being paid. The bitcoin will only become available to the buyer if the title insurance provider or the attorney handling the escrow is willing to accept bitcoin to close the transaction.
Whether or not the realtors get paid their commissions in bitcoin would be for the realtors and the seller to decide.
Real Estate Embraces Bitcoin
The Philadelphia offering reflects the rising use of bitcoin for real estate transactions.
The World Wide Land Transfer website noted that a New York City-based brokerage, Bond New York, is already accepting bitcoin as payment for real estate transactions. Noah Freedman, co-founder of the brokerage, said bitcoin is a convenient and inexpensive way for customers to transfer money. He cited reduced or non-existent processing fees as a key bitcoin benefit.
Echoing these sentiments was Ragnar Lifthrasir, president of an organization called the International Bitcoin Real Estate Association, in a recent article in Opp.Today (Overseas Property Professional). Lifthrasir said the blockchain is positioned to improve options for real estate record keeping. He also said bitcoin can make real estate a liquid asset, eliminate fraud, reduce costs, hasten transactions, improve financial privacy, democratize investing, internationalize markets, and reemphasize equity.
The Philadelphia open houses are scheduled for Sunday, Jan. 17 and Jan. 31 from 1 p.m. to 3 p.m.
Images from PhillyMarketNews.