Swapping Houses is Becoming Popular
Home exchange for holidays has been ongoing for some years now and is a very popular way of having a cheaper and more comfortable holiday. Couples worldwide are now going one step further in the trend of swapping houses permanently.
With the decline in house sales this could help towards the solution of moving quicker and cheaper.
If the houses are of equal value it’s a straight swap, but if there is a difference this can be solved by cash being paid to make up the difference.
Living in Georgia and wanted to move closer to their grandchildren, Allen and Wilma Sawtelle searched the internet until they found Amy and Roy Farr who in turn needed to move because of a new job position. Both houses has been on the market for some time and frustration and stress at not being able to sell their homes led them towards a website specifically dedicated to people looking to swap houses.
The way it works is that each family sells one house in one transaction and they buy another house in a separate transaction – it’s just a case of them both buying each others house. As long as both parties are happy with the price agreed, a lot of money can be saved with using one real estate that is willing to cut his commission with doing two deals at once.
Lawrence Yun of the National Association of Realtors said "I do see more Internet sites available for these bartering arrangements. In the past, we have not seen it.”
Snippets of Information
Although the idea sounds easy and may help in you moving quicker, you should always remember any pitfalls that could occur.
- Remember here in the UK both owners of the houses will have to pay full stamp duty.
- It is essential for both you and those with who you are swapping to be happy that your houses are of an equivalent value.
- Get both homes valued. This is so that you can agree the amount of the balancing payment that the owner of the less expensive house will pay to the owner of the more expensive house when the properties are swapped.
- If only one of you saves money on agent's fees by exchanging houses then the other will understandably want a share of the saving.
- Carefully consider how you and the owners of the other house became aware you were each looking to move.
Make it Legal
Because it could be a straight swap, don’t try and cut corners by drawing up your own contracts, you both need to obtain your own lawyers.
Contracts for the exchange of properties could be either a single document which includes all the terms of both transactions or two separate documents.
The other lawyer will need an undertaking from your lawyer to pay off your existing mortgage. Similar considerations will apply to the person whose home you are acquiring.
Remember after completion to send a Land Transaction Return to the Revenue and Customs Stamp Taxes Office which provides details of the value of the house you have purchased.
Take extra care if you do decide to go down this route and always get professional advice on something as expensive as your home. Although you won't need to use an estate agent, you will still need to have legal contracts drawn up. You are never sure who you are dealing with via the internet.
