Home swapping gains in popularity

Given the continuing state of the slow housing market, home swapping is starting to gain popularity as a way to trade places with someone else. From an article in the L.A. Times:

For years people have been swapping homes for vacations. Today, the idea of permanent exchanges is gaining support among disillusioned property owners struggling to sell in a glacial real estate market.

Although the number of completed trades isn't being tracked, interest is such that several home-swap websites have sprung up in the last year and now claim close to 40,000 combined swap listings nationwide. Others appear regularly on Craigslist.org...

Though the number of swap listings is still a small fraction of total property listings, website operators are confident they have hit upon a simple way to help ease today's market woes -- matching buyers and sellers.

"It's like a dating service for home sellers," said Greg Holt, chief executive and co-owner of Denver-based Pad4Pad. "We're bringing people together."

From St. Augustine, Fla., Sergei Naumov, creator and owner of GoSwap.org, agrees. "The concept works as simply as: 'I will buy your house if you buy mine.' "

These websites, along with others such as OnlineHouseTrading.com, DomuSwap.com and DaytonaHomeTrader.com, say once potential swappers feel they have the makings of a match and begin negotiating, they are on their own and the process runs much like any other real estate transaction.

Having decided to swap homes, both parties need to agree on the value of their respective properties and secure fresh mortgages. Any difference in value will be paid either in cash or by using funds from the new mortgage...

Pad4Pad's Holt said because both parties have already connected, he has found real estate agents willing to assist for a flat fee of about $700 instead of more costly percentage commissions.

Sites also suggest that people share the same title company to ensure that both deals go through simultaneously and that nobody is left holding mortgages on two properties.