What is House Swapping

The new real estate craze is home swapping.  What's all the buzz about?  The concept initially started back in the 1950's as people swapped their homes for vacation purposes, typically with friends or colleagues.  The concept was formalized in the 1960's and has exploded with multiple sites offering vacation homes for swap.  Now, driven by the slumping real estate market, desperate home owners are turning to permanent home swapping to sell their homes.

Home swapping, house swapping and permanent home trades are all different names for the concept of 'I will buy yours if you will buy mine'.  Swapping is just another marketing strategy you or your real estate agent can use to find a potential buyer for your home.  The catch is that you must be willing to buy their home as well.  The idea is to bring two sellers together and simultaneously purchase each others homes.  Why simultaneously?

The misconception around permanent home swapping is that you are trading the current value of your home for the value of the other home.  Thus having to trade for homes of equal value or one of the parties is willing to make up the difference.  The values of the homes are actually irrelevant because, you are just agreeing to purchase each others properties at a negotiated price.  The same as in any real estate purchase.  The only difference is you will be both buyer and seller in the same day.  Permanent home swapping was the marketing strategy that turns home sellers into buyers.  Without swapping, this sale would never have occurred due to each party having a property to sell.


The financing is exactly the same as any other real estate transaction as well.  Most homes today have some sort of mortgage on them.  These mortgages would need to be paid in full before you could purchase another home.  Typically this is done by the new buyer's mortgage which your new loan will do the same for them.  Once paid off, your new mortgage will fund.  This is why we suggest you close the properties at the same time and preferably with the same title company.  This will make the process a smooth one for the new mortgages.   


Home swapping is not the savior to the troubled real estate market.  It should be a piece of a comprehensive marketing plan designed to use every tool available to sell your home.  If you are using a real estate agent, make sure they are familiar with the home swapping concept.  If they are, it should tell you they are doing everything they can to meet your needs.