Local Realtor Justin Miller finds an innovative new way to help clients purchase property
Written by Wendy Bowman
A relatively new form of currency, Bitcoin—a digital cash system that enables people to send peer-to-peer payments online—has hit the shores of South Bay, having been recently used to purchase a new home in East Manhattan Beach. The largest residential transaction in California to translate bitcoins into cash, the home sold for $3.225 million. Earlier, in 2014, a luxury residential community in Lake Tahoe sold a 1.4-acre home-building site for $1.6 million worth of the digital dinero.
Introduced in 2009, Bitcoin involves no banks, credit card companies or financial institutions, and transactions typically require both purchaser and seller to have a Bitcoin wallet (an app that allows an individual to make electronic commerce transactions) from sites such as bitcoin.org. Bitcoin is traded online through Internet exchanges, with value fluctuating greatly. For example, the price of one bitcoin currently equals about 1,017 U.S. dollars.
“Bitcoin is an exciting new currency people aren’t really familiar with,” says Justin Miller of Redondo Beach-based The Miller Group, who represented the buyer of the East Manhattan Beach home with coworker Piper Moretti, and also closed on a $2.3 million commercial deal in El Segundo recently using Bitcoin. “I didn’t know a lot about Bitcoin. We basically had to find an escrow company that would accept Bitcoin payment and initially had a hard time finding one. After some research, we found out that there was one other property in the state of California that was purchased in Lake Tahoe via Bitcoin. They used a service called BitPay that will take the bitcoins and turn them into cash.”
“… Bitcoin involves no banks, credit card companies or financial institutions, and transactions typically require both purchaser and seller to have a Bitcoin wallet…”
A BitPay executive came to visit Miller and explain the process, and once the seller of the East Manhattan Beach home was on board, Miller’s team was ready to compete the deal. How did it work? The buyer—who worked in the dot.com world—first had to show proof of funds by displaying the payment wallet on his mobile phone. The sellers then had the option to take the payment fully in either Bitcoin or U.S. dollars; they chose U.S. dollars, which Bitcoin processor BitPay provides via direct bank settlement. Instead of waiting a few days for a wire transfer to clear, the client and the escrow service completed the transaction within an hour.
For the $3.225 million in bitcoins, the buyer of the East Manhattan Beach property will get a five-bedroom, 4,562-square-foot modern farmhouse-style home at 1400 21st Street, which was listed by South Bay agents Mike Michalski and Sachi Fujita of Re/Max Estate Properties. The best part: after converting the currency, the value of the buyer’s Bitcoin appreciated during the time he went under contract and the close of the escrow date (from about $750 to $1,000). That left him with a 25 percent (or about $1 million) windfall that he reportedly used to buy a Lamborghini from a car dealer that also accepts Bitcoin.
“I want to continue to find ways to help clients expand their ability to find and close properties—and to take advantage of new methods available in the market,” says Miller. “Since the opportunities in our world change every day, we remain open to new things and work hard to change, too.” It’s true…we’re all living in a digital world.