‘House swapping’ is growing real estate trend

By Christa Buchanan
C & G Staff Writer

Difficulties in selling a home in today’s shaky economic climate have caused some homeowners to think outside of the box and into the past.

Rather than offering incentives, such as plasma TVs, some homeowners are going back to the way business was done in the olden days, when bartering was an everyday occurrence, and have put their homes up for “swap.”

“The current market is holding many families back. They can’t get into a new home until they get rid of their old home first,” said Mike Kalis, vice president of sales and marketing for Marketplace Homes in Beverly Hills, of how the changing real estate market has led many homeowners to realize that trading may be a viable way of getting the home they want.

“Basically, it’s reciprocal selling — you buy mine, I buy yours. Two homeowners buy each other’s houses. … It’s become really prevalent in the last few months, especially since we were featured on ‘The Today Show,’” said Remax Realtor Daniel Westbrook, CEO and founder of Florida-based OnlineHouseTrading.com, which he launched in June 2007 and has since been featured on CNN and “Good Morning America,” to name a few.

As this approach only works if the perfect match is made, OnlineHouseTrading is designed much like a dating service: Each party enters both their own home’s criteria and that of what they are looking for, and OnlineHouseTrading provides them with the potential matches with whom to swap their homes.

“Michigan is our fifth largest state as far as trading. … We have 2,340 listings in Michigan alone,” Westbrook said, adding that currently, there are “approximately 400 listings in Detroit proper,” with more than 40 in Macomb Township, approximately 20 in Sterling Heights, 60 in Warren and 24 in West Bloomfield, among other listings.

“Right now, there are a lot of sellers that want to be buyers, but they can’t sell. The likelihood of selling is slim to none — there’s too much competition with short sales, foreclosures,” Westbrook said. “If we can get two motivated people together … we can get these homes off the market, and we can help free up the market and help stimulate real estate sales.”

That’s also the focus of Marketplace Homes, which originally was a “rent-to-own” home-buying business, but has taken the house-trading trend to the next level by partnering with local builders, including westside builder Hunter Pasture Homes, GTR Builders in Macomb and Winnick Homes in Warren.

“We took the standard home trading program — ‘buy my home, I’ll buy yours’ — and expanded it to be ‘buy any home from my list of home builders or Keller Williams participating sellers, and we will buy or, perhaps, long-term corporately lease yours,’” Kalis said.

“Ninety-five percent of our clients have small starter homes and are looking to move up. They are generally younger, recently married with growing families. These people have good jobs, solid incomes and growing families.  Today’s real estate market isn’t giving them the price they need for their home, yet they know it’s a great time to buy,” said Kalis, adding that his company is “helping people move into their dream homes” now rather than later.

The house-trading approach can work for nearly anyone, said Westbrook, as it’s possible to move up or down in size and price, or even trade to another city or state.

“There’s people in every market — some want to upsize, some want to downsize. Detroit people move to Tampa and vice versa,” said Westbrook, adding that it’s attracting those who are relocating, empty nesters, young growing families, and even people who want to swap vacation homes. 

“I’ve seen a lot of posting regarding this — those with lifestyle changes unloading recreational properties. Northern Michigan is seeing a lot of that. … I don’t know if it’s an indicator of what’s happening in the current market,” said Furhad Waquad, a Realtor with Max Broock Realtors and the current president of the Metropolitan Consolidated Association of Realtors, of postings he’s see on Craigslist, where scores of homes were up for swap as of press time.

However, like with any important transaction, Waquad said, it’s important to take caution, as you never know if whom you are dealing with is legitimate.

“It’s not part of the MLS (multiple listing service) system, it’s happening elsewhere. One client had 15 leads from Craigslist — none of them turned out to be good,” said Waquad.

That’s why it’s recommend that homeowners use a Realtor when doing a trade.

“We recommend them to use a professional,” said Westbrook, citing paperwork and marketing as just a couple of the things with which homeowners may need help.

Overall, house-trading transactions go through the same process as traditional home sales, so inspections are also an essential part of the process.

“We typically inspect all properties we acquire. We also recommend our clients have the new home they are purchasing inspected as well,” said Kalis, adding that “there is no charge to the family whose home we are purchasing.”  

It’s recommended that both parties use the same title company — some homeowners also share moving costs — to ensure both transactions close at once so that one party is not stuck with two mortgages, and everyone comes away pleased with the swap.

Visit www.marketplacehomes.com or www.OnlineHouseTrading.com to learn more about each company’s services.

You can reach Staff Writer Christa Buchanan at cbuchanan@candgnews.com or at (586) 498-1061.