When I need to put gas in my car, I usually stop by Costco on my way in to work in the morning. I get there just around 6 AM, when the place opens, and usually spend a few minutes chatting with the guy who unlocks the pumps. He knows I'm a real estate investor because my car has a license plate frame that says "I Buy Houses" and we often talk about local real estate trends.
This morning he told me he has seen stories of people who are trading their houses with someone else instead of buying a new one. With prices still too high in some parts of the Valley, these people can't afford to purchase a new home, so they find someone to swap houses with. The hard part, of course, is getting two people together who have homes the other one wants and are similar in price range, but that's a something the internet is great for.
I'm not sure how all the details would work out. I'm sure if one home was worth a couple thousand more than the other, the extra cash would be paid, so the typical exchange probably isn't a true house swap. However, this is an interesting concept.
I'm sure Realtors won't like this idea, since there would be no commission in it for them.
Thursday, August 09, 2007
House Swapping
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8 comments:
So how does the subsequent mortgage swap work, or are these just for properties with no mortgages?
I imagine it would just work like an actual sale. The net result though, would be that neither person is left with any cash or has to bring cash to closing (apart from maybe a small difference to make up for the difference in house values and closing fees, etc.)
Each person gets a new loan to buy the other's house. Each one pays off the other's old mortgage and they are left with a new mortgage on their new house.
ok, that makes sense. Whatever equity they had, they will still have, because the loan size will be based on paying off the prior mortgage.
I love the idea. It brings to mind "bartering for goods". And, although it's probably difficult to find a likeminded home owner with a house that you'd like to own, skipping the uncertainty of whether you can sell your own house makes it worth it.
We lived in Kansas City when I was about 4-5 years old, and had family friends who swapped houses. They lived across the street from one-another and each liked the other family's house more. It seems kinda weird now, but it made sense in my pre-K mind :)
What do you think the interest would be in a site that puts potential house swappers together that automatically generates matches based on selling and buying information.
Given the current market conditions, there could be a lot of interest in it.
I saw a news story on CBS about this they had a guy on from www.OnlineHouseTrading.com talking about a gentlemen who traded across the country to be near his grandchildren. It was really sweet.
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