We’ve talked recently about the growing interest in house-swapping. That’s where two people agree to buy each other’s home at the same time, rather than deal with the stress of trying to buy one house while selling another. According to Time magazine, house-swapping has become increasingly popular during the economic downturn. In fact, while traditional real estate sales have been slow, a record number of homeowners are flocking to house-swapping websites that bill themselves as “real estate matchmakers.” For example, home-swap postings on Craigslist and OnlineHouseTrading.com have jumped 50% this year, while searches on the free website GoSwap.org have doubled in recent months.
House-swaps generally take place within the same town, but a growing number of swaps are now taking place in different states, or even different countries, as families pursue new job opportunities. Once two people have agreed to swap homes, the transaction unfolds like a normal real estate sale – with double the paperwork. Both sides have to be approved for loans, and both have to sign mortgages at the same time. That way neither person gets stuck paying for two houses. Also, if there’s a difference in price between the homes, the person buying the more valuable home will pay the difference.
So what are the drawbacks to house-swapping? Experts say there are virtually no tax advantages, and you’ll still have to pay closing costs. Also, the odds of finding your “dream home” are very slim. You basically have to walk into a swap transaction thinking either: “Yeah, I can work with this,” or “Sorry, I’ll pass.” House-swapping won’t be for everyone, but it can be a great way to sell your home after you’ve exhausted all other options. In fact, one couple in the Time article said they decided to swap only after waiting more than two years for a real estate agent to sell their home. After posting it on a swap website, it sold within three weeks.