I'll Buy Your House If You Buy Mine
The concept of trading homes temporarily for vacations has long existed, but now it's being adapted to the slumping real-estate market as people scout for ways to unshackle themselves from their property. The number of people doing this is still relatively small, but it has popped up from virtually nothing in recent years.Fans say swapping is suited to the current down market, where people are extra nervous about buying a new house before selling their old home. Searching for a swap is much like using a dating service: The odds can be good but the goods can be odd.
Experts say it's probably best not to get involved with someone who owes more money on their house than what it is worth because they could have a tough time getting financing. OnlineHouseTrading.com recommends that both clients use one title company that knows not to complete the deal "until everyone signs off." Daniel Westbrook, the co-founder of the company says, "The scariest thing that could happen is that you buy someone else's house and they don't buy yours."
Both sides of a swap transaction typically close simultaneously taking away the risk of being saddled with two mortgages at once, or of having to borrow more after purchasing a new home because your old house didn't sell for as much as you thought it would. If there are homes of unequal value, one buyer provides the cash or gets a mortgage to make up the difference experts say.
Source: Real Estate Journal
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