“Necessity breeds opportunity,” as the saying goes…or at least that’s the case when it comes to real estate. Thanks to the weak housing market, home owners and real estate professionals are coming up with all kinds of innovative approaches to making home buying and selling possible.
One of the new approaches that is quickly gaining clout comes in the way of house swapping. It’s a sort of, “I’ll buy your house if you buy mine” kind of deal, also known as permanent house exchange. Find out the pros and cons to this sort of arrangement and decide whether it’s an option for you.
The lowdown on house swapping
House swapping isn’t an entirely new phenomenon. People have been vacation house swapping for a long time. A clever trick for making a vacation homey and inexpensive, vacation house swapping is when two homeowners agree to switch houses for a set amount of time so each can enjoy living in the other’s hometown. It’s a deal with no strings, no hassle, and no long-term commitment.
Permanent house exchange is different. It’s the same principle – as in, two homeowners swap houses – but it actually involves the official purchase by each homeowner of the other homeowner’s house.
How to house swap
Permanent housing swaps are a lot like online dating. Find a site that appeals to you and then upload your profile – your home’s profile, that is. From there, include pictures and a detailed description of your property.
If you get a response to your listing, ask to see pictures of the property. Visit the property in person (and preferably during the daytime) before you consider anything.
Take the usual precautions involved with home purchase – hire a home inspector, get a qualified appraisal, and research any potentially negative events that could affect the integrity of the house.
The plus side to permanent house swapping
Permanent housing swaps, also known as permanent house exchange, is a great way to get your home sold in a tough real estate market. For those who are confident buying a new house only after selling their own home, it presents a real opportunity. Not only is it described as painless, but it also helps take a big burden off your shoulders – especially if you’re set on moving.
Another bonus to house swapping comes in the form of money saved. Generally speaking, you’ll be able to save the real estate fee you’d normally pay if you sold or bought a home in the traditional manner.
There’s also a good chance you’ll wind up with a sale closer to your original asking price rather than having to negotiate down. This is because those looking to exchange are generally looking for a house of equal value. Rarely does anyone try to house swap for a substantially greater or lesser amount than the home they’re already in.
The downside to permanent house swapping
House swapping isn’t for everyone. For starters, you have to be pretty proactive and do your homework. The only way you’ll find a house you like is if you spend time looking for it.
You’ve also got to invest a lot of patience. It’s not always easy to find someone who not only wants to move from the area where you’d like to live but also wants to live in your current area.
It’s a given that there won’t be as many properties available to you as you would find in a traditional house hunt. This is particularly true if you’re looking to move to a place where the real estate market is still strong.
You may also have to make some concessions on the home you buy – after all, it’s tough to find the perfect house in the perfect place, let alone with an owner willing to take you up on your offer to sell your own house.
If you go for it, make sure you do this
If house swapping suits you and you’re lucky enough to find a match, take a few precautions. For starters, make sure you sign two contracts – one to buy your new house and one to sell your old house.
Ideally, set up both closings for the same day so neither you nor the home owner you’re swapping with ends up holding two mortgages at any one time.
It’s also a good idea to invest in some sort of representation –a knowledgeable realtor, an attorney, or a title company. Make sure you have some way to check for details and loopholes so both sales transactions go smoothly.
Finally, make sure you’re thorough. Visit the property and hire a qualified inspector before you agree to sign anything. When it comes to high dollar figures like those found in home shopping, you want to be sure you know what you’re getting on the other end.
