The mechanics are simple: sell the bitcoin, withdraw the dollars, wire them to escrow. The timeline is the trap: exchanges cap daily withdrawals, banks stop sending same-day wires in the early afternoon, and escrow deadlines don't move for any of it. If you're cashing out six figures the standard way, start earlier than feels necessary — or skip the liquidate-first step entirely and convert at closing.
A $400,000 closing funded through an exchange with a $100,000/day fiat withdrawal limit takes at least four business days of withdrawals — before wire cutoffs (typically early-to-mid afternoon at most banks), weekend settlement gaps, and the review holds banks routinely place on large inbound transfers. Withdrawal limits vary by exchange and verification tier; check yours before you're against an escrow deadline.
The exchange clock. Selling is instant; getting dollars out isn't. Daily fiat withdrawal limits mean a large cash-out happens in installments, and support tickets to raise limits take time you may not have.
The banking clock. Each withdrawal lands as a large deposit at a bank whose fraud systems have opinions about large deposits. Then the outbound wire to escrow only moves same-day if you submit before the cutoff. Miss it on the wrong Friday and you've lost three days.
The escrow clock. Closing disburses against received good funds, not promised ones — the mechanics are covered in the closing process explainer. Title and escrow companies have watched deals slip over funding that arrived a day late; they will not pretend otherwise for you.
Above roughly $100,000–$250,000, over-the-counter desks (many exchanges run one) will quote and settle a large sale in a single transaction — no retail withdrawal queue, better execution on size. That solves the exchange clock. It doesn't solve the rest: you're still selling early, still realizing gains on the lender's schedule, and the proceeds still land in your bank account as — say it with us — a large deposit your underwriter will want sourced. Keep every confirmation the desk gives you.
Selling bitcoin is a taxable disposal, full stop — the house at the end of the money doesn't change that. What you control is when: cash out three months early and you've realized gains on someone else's schedule while sitting in cash through whatever the market does next. The full treatment — basis, holding periods, the 1099-DA era — is in how buying a house with crypto is taxed.
Step back and notice that every problem on this page is an artifact of one assumption: that the bitcoin must become bank-account dollars before the purchase. It doesn't. With direct-transfer funding, your funds are verified up front (that's the Proof of Funds letter, about 15 minutes, from any wallet — cold storage included), you keep your position until closing day, and conversion happens at closing through OTC execution with the proceeds wired straight to escrow. No withdrawal limits, because there's no retail withdrawal. No bank holds, because the money never stops in your account. One taxable event, timed to the moment you actually need dollars. That's the standard RealOpen flow.