Trading houses is not for everyone, however if you are having trouble selling your house, trading it for another could be the right option for you. The concept of trading houses has been around for a while, especially when it comes to temporary trades for vacations, but because of the slump in the real estate market the urge to trade houses as a permanent swap is becoming more popular.
The word trade may be a bit confusing, as you are not literally trading your house; rather you are selling it to a buyer where you will buy their house in return. This is also often referred to as a house swap or a house exchange.
When it comes to money changing hands, house trades are very similar to a regular house purchase; you still have to qualify for a mortgage, you still have to pay a down payment and your house still has to have a closing date.
The difference between a regular house purchase and house swap is that the closing dates are scheduled for the same time, providing the piece of mind that you will not be stuck with an additional mortgage.
Here is how trade houses work: each homeowner sells their house in one transaction, and then buys another house in a separate transaction. With house trading it just happens that the homeowners are buying each other’s houses.
First and foremost you have to find someone willing to trade houses with you. Technology has helped to bring homeowners interested in trading houses together. There are now many websites available that will help put you in contact with someone interested in trading.
Once you have found a homeowner interested in trading, a real estate lawyer should be brought in to ensure that neither homeowner will suffer any losses.
There are many reasons why you might want to trade houses:
1) Trading your house will make it easier to sell a property that would be otherwise unable to sell.
2) Save money by not having to pay real estate commission or broker fees.
3) Trading houses will make it easier to buy new houses as some builders will buy your house if you buy theirs.
4) Trades houses have simultaneous closing, which ensures you will not end up with two mortgages at the same time.
5) With house trading it is not necessary for both properties to be of equal value.
6) With house trades you may close faster as both houses close at the same time.
7) You are more likely to receive the appraised value for your house
8) Trading houses also makes it easier to get bank financing.
Like anything good in life there can also be some down sides:
1) Some homeowners looking for House trades may actually owe more than their house is worth. This could cause problems for you, as they may not be able to get a mortgage.
2) Since you have the option to trade houses that are not equal in value homeowner may have to come up with cash or a mortgage to make up the difference.
3) When it comes to trading houses you have to be more flexible when it comes to choosing your house.
Trading houses is not for everyone, but there are still many good reasons you might wish to trade houses, from the ability to sell a house that would be otherwise unable to sell to faster closing times and higher sale prices to saving money on commissions and fees. In the end, it is for you to decide what is right for your own situation.
Author Resource:-
David Leonhardt and Corey Rozon offer ghostwriter services from Canada.
For more information on rent to purchase and trade homes please visit RealEstateSynergy.ca.
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