The Swap Process

The swap process is comprised of three parts, the negotiation, financing and closing. 

I. Negotiation
 
Once you find a property to swap with it's time to do your home work.  Just because a home is listed at a certain price, does not mean that is what the home is worth.  Comparables are homes of similar characteristics in the same area that have sold over a recent time period.  These comparables will give you an idea of what the home you are looking at should sell for.  An appraisal done by a licensed professional can insure you of the fair market value.  Once you have decided on the amount to offer proceed to formally write out an offer to purchase the home.  We strongly suggest utilizing the knowledge of a real estate agent or real estate attorney to guide you through this step.  Make sure your offer to purchase is contingent upon the sale of your home.  Once accepted, it is off to get financing.  While you are going through the financing process make sure to order an inspection on the home you are purchasing.  This will give you piece of mind that the home is in acceptable condition.   

 II. Financing

As you know, the landscape for being accepted for a mortgage has changed.  This being said, it is a good idea to get pre-approved before you accept or extend an offer to purchase a home.  Once pre-approved and your offer has been accepted, it is time to secure your loan.  Contact your mortgage professional to inform him of the acceptance of your offer and to start the loan process.  Make note that your new loan will not fund until your existing property is sold.     

III. Closing
 
Closing is the final step in the home swap process.  To satisfy your lenders requirements, your home must be sold before they will fund your new loan.  This is why we suggest doing the closings for both properties at the same time.  We also recommend using the same attorney or title company to insure that all the correct paperwork is completed.