Decrypt real estate purchase in crypto with 3 practical cases using Legibloq solution
As a crypto investor, diversifying our portfolio is a strategy worth considering. Likewise, using part or all of our gains to achieve personal goals makes perfect sense. And what could be more tangible than real estate to turn those ambitions into reality?
We have already outlined the key steps of buying property with crypto in the following article:
But how does it actually work in practice? Let's explore it through the following concrete cases:
- A purchase made with low-volatility cryptos, fully paid to the seller in euros.
- A purchase in Bitcoin, half paid in euros and the other half in crypto.
- A purchase using cryptos combined with a bank loan, fully paid to the seller in euros.
Assumptions: to simplify the calculations in the following examples, the values used will be arbitrarily set as follows
- 1 USD = 0.90 EUR at the time of escrow and 1 USD = 0.95 EUR at the time of sale
- 1 BTC = 100,000 EUR at the time of escrow and 1 BTC = 80,000 EUR at the time of sale
- Notary fees = 8% of the sale amount
- Agency fees = included in the sale amount
Case 1: A purchase in crypto (USDC) paid in euros to the seller
1. Project Definition
After initial contact from the buyer (which could also have come from the notary or real estate agency), we analyze the planned transaction based on the purchase offer (or preliminary sales agreement). This includes details of the property, identification of the parties (buyer and seller), and the financing structure.
In this case, the buyer—a first-time homebuyer employed full-time who invested in crypto back in 2018—wants to purchase a villa on the outskirts of Lyon for €350,000 using cryptocurrencies. Specifically, he plans to pay in USDC, a stablecoin pegged to the US dollar (1 USDC = 1 USD).
The total sale amount is therefore estimated at €378,000 (350,000 * 1.08) including notary fees, which corresponds to 420,000 USDC (378,000 ÷ 0.90).
To ensure that the funds will be available on the day of the sale and to hedge against exchange rate fluctuations between the USD and EUR amid the escrow setup and the final signing, Legibloq applies an overcollateralization coefficient. In this example, this coefficient is set at 1.1, meaning that 462,000 USDC (420,000 * 1.1) must be placed in escrow.
2. Escrow Setup & Signing of the Preliminary Contract
In accordance with current regulations, an initial KYC process is required to verify and validate the buyer’s identity.
An escrow agreement is then signed with the buyer, outlining all the conditions of the transaction. A unique blockchain address is created specifically for the buyer to deposit the funds securely.
The funds and their origin are thoroughly analyzed by tracing all past transactions (KYT) to comply with regulations on fraud prevention, anti-money laundering, and counter-terrorism financing (AML-CFT). Once verified, the funds are transferred to the escrow address.
If the funds are deemed irregular, the escrow is rejected. Otherwise, the transaction can proceed.
The sales agreement can then be signed, and the security deposit paid in euros to the notary's CDC account (Caisse des Dépôts et Consignations). In this case, the deposit amounts to €17,000, meaning 18,888 USDC (17,000 ÷ 0.90) will be converted and instantly transferred by our PSAN partner from the escrow account.
3. Final Payment & Signing of the Deed of Sale
Upon receiving the notary's request for funds, we oversee, through our PSAN partner, the conversion of USDC into €361,000 (378,000 - 17,000) and its direct transfer to the designated CDC account.
On the day of the signing of the deed of sale at the notary's office, the expected amounts have been received, allowing the notary to proceed with payments to the respective parties (seller, real estate agency, tax authorities).
After applying the exchange rate at the time of conversion, only 398,888 USDC (18,888 + 361,000 ÷ 0.95) will have been used. The remaining amount in escrow, 63,112 USDC, will be returned to the buyer (after deducting Legibloq's fees for managing the transaction).
Case 2: A purchase in crypto (BTC) paid to the seller half in euros and half in crypto (BTC)
1. Project Definition
Prior to a significant real estate transaction, a notary contacts us to intervene in a deal where the buyer wishes to pay the full amount in crypto, and the seller agrees to receive half in crypto and the other half in euros. We review the key details of the proposed transaction provided by the notary—property details, identity of the parties (buyer and seller), and financing structure.
The buyer, a non-French resident, wishes to become the owner of a luxury property in Marseille valued at €5,000,000 using his bitcoins, the flagship currency of the crypto ecosystem.
The total sale amount will be approximately €5,400,000 (5,000,000 * 1.08), including notary fees, or 54 BTC (5,400,000 ÷ 100,000).
To ensure the availability of funds on the day of the sale and mitigate BTC volatility between the start and completion of the transaction, a over-collateralization coefficient (set at 1.6 in our example) will be calculated and applied by Legibloq. As a result, 86.4 BTC (54 * 1.6) will need to be deposited into escrow.
2. Escrow Setup & Signing of the Preliminary Contract
To comply with current regulations, the first step is to verify and validate the buyer's identity through a KYC process.
The buyer will then need to sign an escrow contract with Legibloq, outlining all the terms of the transaction. Following this, a unique address will be assigned to him for depositing the funds.
In order to meet AML-CFT requirements, the buyer's banking and crypto platform documents are reviewed, and the holding addresses are thoroughly analyzed by tracing their transactions history (KYT) before the funds are fully transferred to the escrow address.
If any irregularities are detected, the escrow is refused. Otherwise, the transaction can proceed.
The sales agreement, including a clause specifying that the buyer will pay in crypto and that the seller will receive half in euros and half in BTC as payment-in-kind, can then be signed.
An earnest money deposit of €500,000 will be transferred in euros to the notary’s CDC account. For this, 5 BTC (500,000 ÷ 100,000) will be converted and instantly sent from the escrow account via our PSAN partner.
3. Final Payment & Signing of the Deed of Sale
The receipt of the notary's fund request by our PSAN partner will trigger, under our supervision:
- The conversion of BTC into euros for an amount of €2,400,000 (5,000,000 ÷ 2 - 500,000 + 400,000) and its direct transfer to the designated CDC account (half of the amount - earnest money deposit + notary fees), i.e., 30 BTC (2,400,000 ÷ 80,000).
- The transfer of BTC to an address held by the seller for an amount of €2,500,000 (5,000,000 ÷ 2), i.e., 31.25 BTC (2,500,000 ÷ 80,000).
On the day of the signature of the authentic deed at his office, the notary will have received the crypto transfer certificates as well as the expected amounts in euros and can then proceed with their disbursement to the various parties (seller, agency, tax authorities).
For the entire operation, 66.25 BTC (5 + 30 + 31.25) will have been used. The overcollateralization effectively protected the transaction against Bitcoin devaluation, and the remaining 20.15 BTC in escrow will be returned to the buyer (after deducting Legibloq’s fees for escrow services and its intervention throughout the process).
Case 3: A purchase in crypto (EURC) supplemented by a bank loan, fully paid to the seller in euros
1. Project Definition
To assist one of its clients in structuring a property acquisition, a real estate agency schedules a meeting to present the project, which we analyze based on the provided information: details of the property, identities of the buyer and seller, and financing structure.
The operation involves acquiring an apartment in a Southern Alps ski resort for rental investment purposes. The property, valued at €250,000, will be partially financed through a €150,000 loan, with the remaining amount covered by the buyer's crypto holdings in EURC, a stablecoin pegged to the euro (1 EURC = 1 €).
The total amount to be financed will therefore be €270,000 (250,000 * 1.08), including notary fees.
In order to sign the preliminary sales agreement and secure the bank loan, 120,000 EURC (270,000 - 150,000) will need to be placed in escrow using the Legibloq solution.
2. Escrow Setup, Signing of the Preliminary Sales Agreement & Obtaining the Loan
As with any transaction that must comply with AML-CFT regulations, the first step is to verify and validate the buyer's identity through a KYC procedure.
Once the escrow agreement outlining the transaction conditions is signed with Legibloq, a segregated and secured blockchain address will be provided to the buyer for transferring the assets.
The analysis of the legitimacy of the transaction and the funds involved includes reviewing their origins as well as all past transactions (KYT). If any irregularities are detected, the transaction is automatically rejected.
The EURC can then be accepted, and the escrow process can begin. A sales agreement will be signed, including a suspensive clause related to the approval of a €150,000 loan by a banking institution. A deposit of €25,000 will then be transferred to the notary after converting 25,000 EURC.
The escrow certificates and coordination with our financial intermediary and brokerage partners will enable the buyer to secure the necessary bank loan to finalize the transaction.
3. Final Payment & Signing of the Deed of Sale
To prepare for the signing of the authentic deed, the notary sends the fund request to Legibloq and the banking institution:
- Our PSAN partner, under our supervision, will convert and transfer the remaining 95,000 EURC to the notary’s CDC account.
- The bank will release the loan funds and transfer the €150,000 in the same manner.
On the scheduled day, once the notary has received the expected amounts, he can proceed with handing over the keys and making payments to the involved parties (seller, agency, tax authorities).
Legibloq, a Solution Tailored to Your Projects
As we have just seen through these three practical cases, the Legibloq solution adapts to your various projects and helps bring them to fruition by securing their financing. Our mission is to support you at every stage and ensure their success.
Don't wait—let's explore your project together. Contact us today for a free consultation!
Emeric Fillâtre
03/17/2025
(02/21/2025)
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