Swapping Spouses, Houses?
A friend in Massachusetts told me about a couple-swapping ring going on at their country club — how risque! This I can handle: the DMN ran a cool story on house swapping. I understand house-swapping is a trade, an ”I agree to buy your house, you agree to buy mine” transaction. Like consensual swingers, potential home swappers post pictures (”House Porn”) and descriptions of their homes online, hoping to attract other homeowners looking to trade. (Do they fudge on details, like 6500 square feet and oceans of granite when really those are 12 by 12 granite tiles?) Ideally, they buy each other’s property and even better, no STDs!
The National Association of Realtors does not track swap sales, but a number of house-swapping websites have popped up in the last couple of years, most reporting steady increases in online swap postings, like Craigslist, which reported a 30 percent increase in house-swap listings in 2008 over last year.
So I wish I had asked our teacher about this in school. Vitally, what is the role of the Realtor? I would imagine it would be business as usual for Texas agents, but since out-of-state agents are considered “foreigners” here until they obtain a Texas license, wonder if you have to use an agent or an attorney if the swapper is in another state? And I imagine there are some horror stories out there — about the houses, not spouses — anyone?
PS: Another trend agents tell me we are going to be seeing more of: owner financing. Stay tuned.
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Not a great idea if either or both properties are encumbered with an institutional mortgage. The mortgage can be accelerated for the title transfer and each party’s title and occupancy depends upon the other party’s prompt payment. Perhaps a swap with an agreement ot immediately refinance, but what happens if one or both refinances fail or do not occur ? Yikes.
Atty, I think you are missing the entire point all together. If you read the How To.. section on this site: http://goswap.org/most-frequently-asked-questions-about-property-trading-2.html you will notice that both mortgages are paid off (no need to accelerate anything) as of the date of closing ON BOTH HOMES. If one does not close, there is no closing for the other–due to the required simultaneous closing clause in the contract. I hope this helps… Greg
Respectfully, I don’t think I am missing the point. My first line states “if” they have mortgages. Most homes are not owned free and clear, and mortgage lenders will not just let you trade their collateral. If you simply swap, you are only deeding each other’s title in violation of a due on sale or due on transfer clause present in vitually all institutional mortgages. Now you own property that could be forclosed if your swapping partner does not pay, and vice versa for the other party. For the majority of homeowners, most of whom have mortgages, this is not a solution to their problems, nor a low risk way to purchase real estate.