Spring Sellers Try House Swap Instead

Wendy Bauwens is no stranger to swapping. As a horse trainer, she has traded a harness for a new website and a riding lesson for a haircut. Today, however, she's lining up her biggest swap yet: her horse farm, Sunnyside Farms (pictured at left), located near Bozeman, Mont., for something closer to the ocean. A new place to call home in Hawaii or California are at the top of her list.
As spring selling season gets under way, some homeowners are opting for an unconventional route: house swapping. Even as the housing market defrosts this spring, sellers are on the lookout for creative ways to minimize their costs. Swapping offers several bottom-line benefits: there are few to no agents' fees, sellers can minimize their tax burden, and it's a way to leverage property that may be otherwise difficult to sell. On the downside, swappers face fewer choices and have to be prepared to finance the difference in property value if necessary.

Over the last few years, a handful of websites have sprung up to support swappers, including GoSwap.org, OnlineHouseTrading.com and DomuSwap.com. Craigslist operates a whole category for home trades. The small boom in swap and barter sites took hold at the height of the financial crisis two years ago and shows no sign of waning.


Swapping the Ocean for the Desert

Sergei Naumov, founder of GoSwap, says there are more than 30,000 listings on his website, most of which are concentrated in the southeastern states. Founded in 2006, the site started picking up steam in 2008 and traffic has yet to fall. He estimates the number of successful swaps to be in the thousands.

One of those success stories is Pam Farley, 58, who used GoSwap to trade her three-bedroom home in Osprey, Fla., for an adobe house near Santa Fe., NM. In late 2008, she and her husband were empty nesters, ready to move from their Florida home after 12 happy years. Their timing couldn't have been worse. The housing crisis was rippling across the state and qualified buyers were scarce. After sitting on their for-sale-by-owner listing for more than year, Farley decided to investigate a permanent house trade.



"I listed on several swap sites, and every day I had someone emailing me," she says. "We made adventures out of visiting the potential houses. We went to New England, Idaho, and Oregon. It was cool because we got to see interesting parts of country."

Farley, a painter, knew she wanted to move to the southwest to work on her craft and kept returning to a listing in New Mexico. Willingness try a new location is common among swappers, says Naumov. "A lot of the swappers tend to be older. They are not as bound by where they are, and their criteria is very open," he says. "Many people will consider a swap in any state."

Controlling the Process

Bauwens, who has a degree in marine biology, is also open to what the swap universe might send her way. Part of her desire to move away from her Montana farm, where she has lived for 10 years, is to pursue better job opportunities in marine science. Her other motivation is simply to change the scenery.

"I turned 40 last summer and I am in the mindset that life is too short to not be where you want to be," she says. "I am excited to move and wipe the slate clean."

With bartering as a way of life among horse trainers, Bauwens views her swap as a natural step. By advertising her farm as a swap on Craigslist rather than listing it as for sale, she avoids paying a 6-8% broker's commission and gets to keep the details of the transaction to herself.

"When you list on the MLS, people expect you to lower the prices," she says about her farm, which was appraised for around $350,000 several years ago. "Being in a small town, once it's listed, people start talking."

Making the Deal

After mutual visits to New Mexico and Florida, Farley and her home swapper quickly agreed on a deal. The next step, drawing up the offer-to-purchase contracts, was at the heart of the swap.

Even as the word "swap" conjures the days of yore, the deal is in fact two simultaneous sales. Ideally, both transactions close on the same day to prevent one owner from holding two mortgages or properties. For primary residences of equal value that are swapped, there is no taxable gain. If there is a difference in price, sellers can exclude capital gains up to $250,000 for a single taxpayer and $500,000 for married couples. Swappers of investment properties or businesses may defer taxes through section 1031 of the IRS code.

Farley's deal took several weeks and many drafts of the contracts faxed back and forth. After a wrinkle in securing financing, she was able to get a loan with a local bank in New Mexico and close on the swap in 30 days. "When we were done, it was fair and good," she says. "We protected each other."
As Bauwens sorts through the first trade offers that she has received for her farm, she feels a swap will help ensure the farm goes to another owner who will enjoy it as she has. She renovated the farm house a few years ago, complete with stained-glass windows and old barn wood, and acknowledges that it will be hard to move. "I feel strongly that if you put effort out there, something will happen," she says. "You have to create the good karma and the right thing will come along."

Farley's experience underscores the human connection to home buying and selling that swapping provides.

"Trading puts the power back in the people's hands," she says. "It makes it a real partnership between people possible. They are not stuck in their homes and they can move forward with their lives."
Catherine New is a reporter for DailyFinance.com and Aol Huffington Post.

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flalafaya

Homeowners who need to move should consider swapping homes as a solution to their situation. Solutions like www.MyHouse4Trade.com or http://TrySwappingIt.com should be considered. House swapping is becoming a standard method to conduct homeowner transactions.

July 21 2011 at 12:23 AM Report abuse rate up rate down Reply
turtle

I have a 4 BR home w/ LM and FR, 1 1/2 car garage and 2 out buildings. within walking distance of wonderful school and shopping. Nice and quiet subdivision. Just over a 2 mls from the interstate. Home is located in WV panhandle close to MD, VA, PA. and Commuting distance to DC.
my e-mail is davisdavis05@yahoo.com

May 04 2011 at 12:50 PM Report abuse rate up rate down Reply
sdeasyloan

My property is for sale or permanent swap
Culpeper, VA and about an hour away from the Washington DC metro area. I have a 4 BR 2 BA log home with a large 2 story 40 x 40 building that sits on your choice of 10 or 20 acres in a great private and secluded location. for more information on this property and to contact me please see the following link http://jobin.vflyer.com/home/flyer/home/2633702

May 04 2011 at 7:37 AM Report abuse rate up rate down Reply
sdeasyloan

Culpeper, VA and about an hour away from the Washington DC metro area. I have a 4 BR 2 BA log home with a large 2 story 40 x 40 building that sits on your choice of 10 or 20 acres in a great private and secluded location. for more information on this property and to contact me please see the following link http://jobin.vflyer.com/home/flyer/home/2633702

May 04 2011 at 7:35 AM Report abuse rate up rate down Reply
Denis

I have never met a good real estate sales person. Most of them that I have met don't give a damn about the client and don't know anything about the properties they list; just getting as many listings as possible. If I see a house for sale that I like I do the research myself and make an offer thru the listing agent. My advice to buyers is be prepared and do the research yourself on the house or area that you want to live in.

May 04 2011 at 5:21 AM Report abuse rate up rate down Reply
laptop603

hopin' to exchange our Battle Ground, WA. house for an Albuquerque, NM. house. bg is 20 minutes north of Vancouver, wa. and 30 minutes north of Portland, or. sun and desert for green and clean.. anyone?

May 04 2011 at 2:34 AM Report abuse rate up rate down Reply
Patricia,,,,,

If I could sell my house with out having to use Realtors and such it would be great for Me and who buys my house cut out a lot of extra cost...But living in Ca. thats not going to happen...

May 04 2011 at 2:33 AM Report abuse +1 rate up rate down Reply
tamaricci

3 bd. 2 bath, ranch style home in high desert, Victorville, CA., on cul-de-sac. Fruit trees, 3/4 acres, quite neighborhood. Would like to trade for Oceanside, Ca. tamaricci@aol.com

May 03 2011 at 11:58 PM Report abuse rate up rate down Reply
Monsta V

If she wants to move to Hawaii or California, and her home is appraised for just $350K, I hope she's willing to move into an apartment.

May 03 2011 at 11:36 PM Report abuse +1 rate up rate down Reply
jaclynmeg

Consider a 23 acre horse farm with an 1870 Plantation Home, 3 cottages, 8 stall barn, huge workshop/garage,inground pool.Currently a B&B but would be a great family compound or retreat. Website www.fieldstonefarminn.com

May 03 2011 at 10:18 PM Report abuse rate up rate down Reply