House Swap

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House Swap

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A house swap involves two home owners who basically agree to buy each other’s home, or trade homes for a specified amount of time (using a house swap for vacationing). There are a variety of website that allow users to conduct world wide property exchanges of their homes, and even their boats, yachts, motorhomes, caravans and campavans. In theory, it’s a simple concept, but in practice, there are some considerations that both buyers/sellers should take into account.

The value of the properties may not be the same, and in that case, the seller with the less valuable property will have to come up with the difference to make up the shortfall.
If one seller owes significantly more on the property than the house is worth, the buyer may not be able to get financing from a lender.
Regardless of the location of the swapped house, whether across town or across the country, it’s important to physically check out the properties; an appraisal and home inspection should be performed on each home.
Insist on a simultaneous closing of both properties, so that no one is holding two mortgages at the same time, in the event one of the parties is unable to follow through with the transaction.
Whether or not you bring a Realtor into the transaction at all is entirely dependent upon the property owners, but you don’t need to have two Realtors to finalize the transaction, and a significant brokerage fees could be saved by using one Realtor for both transactions.

In a soft housing market, many homeowners wait for months before they are able to sell their property, at least if they are selling the old fashioned way, through the Multiple Listing Service (MLS) and For Sale By Owner (FSBO) signboards. House swapping is a growing phenomenon, as evidenced by the tripling of free online classified listings on websites such as Craigslist.org. The house swapping concept originated as a way for property owners to sell and/or use vacation properties, but in the past few years, it has become more mainstream and homeowners are now employing this method to sell their primary residences.

Sources:
http://www.theindychannel.com/news/16274670/detail.html
http://abcnews.go.com/GMA/story?id=4322684
http://www.consumeraffairs.com/news04/2008/01/house_swapping.html

Last update: Mar 30 2009, 6:53 PM EDT by EricAmes (content history | content tools) (help)

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