The pros and cons of house swapping

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Dear Real Estate Adviser,
Is there any talk out there about people trading homes and bartering cost agreements and the like, so people can be more free to relocate to find work in other cities in this tough job market?
— Jean

Dear Jean,
There’s much more than just talk. A host of house-swapping sites have cropped up in the past few years, in part for the reasons you mentioned.

There are free listing Web sites as well as pay sites that start at about $30 out there. The growing list includes,,,,, and Craigslist, among several other matchmaking services. Some builders are even getting into the act, offering to buy the used houses of current homeowners if they in turn will buy a new home worth at least 20 percent more than the value of their present house.

Among the many benefits of house-swapping include the savings on two sets of agent fees (average total of 5 percent to 6 percent), the liberation of a pair of hard-to-sell properties and, of course, the peace of mind of not having to worry about making two mortgage payments a month. It’s not uncommon for swappers to save even more money by using the same moving company and same title company when they trade spaces.

On the negative side, you will have far fewer home choices when you’re trying to set up a trade, and one of the homes in each trade is almost invariably worth more than the other, meaning someone will have to pay that difference.

You’ll also have to be approved for new mortgage loans, except in the rare event you are swapping equally valued, free-and-clear homes. Though these swaps are generally friendly transactions, don’t be tempted to take shortcuts on your homebuying research. Get an inspection done of the home you’re trading into and possibly an appraisal. Know upfront that some swappers have a tendency to overvalue their homes for optimum trade value. Examine the neighborhood’s characteristics as well. Is the block a well-used cut-through for motorists? Are there noisy neighbors, barking dogs, loud parties or an inordinate number of nightly visitors?

You will also benefit from having an advocate, either a real estate attorney or at least a real estate agent who will work on a fee basis to help walk you through the many details of such transactions.

While the percentage of swaps in the home-sale universe is still small, it is growing and the universe of for-trade properties has never been larger.

Happy swapping!

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