How does a property swap work ?: An overview of the procedure
A property swap: what is it actually?
A real estate swap is basically a normal house purchase or sale. – With the difference that you sell your property to someone who is also willing to buy your property. When swapping property, it is important that the houses are bought and sold at the same time. After all, it is associated with money and effort to move into other accommodation in the meantime.
Who is a home exchange for?
It is obvious that a property swap is only possible for property owners, i.e. owners of apartments or houses. As a rule, this also includes the equity of those willing to swap. The new house or apartment is financed with the proceeds from the sale of your own property.
Suitable exchange partners can be found through real estate agents, for example. There are also some internet portals and banks that specialize in this form of real estate sales.
Often it is older couples who want to reduce space when the children have left their parents’ nest. Most of these property sellers typically strive for an accessible condominium. The gaming table, where you had a lot of fun with friends while playing together, may no longer find a place here. But the advantages predominate: the garden no longer needs to be looked after. But you are closer to shopping, culture and medical specialists.
But deaths and divorces also cause one or the other homeowner to part with their property.
Conversely, there are also couples and families who would like to swap their condominium in the city for a house in the country.
Reasons to exchange home
- In so-called structurally weak regions, despite the ongoing real estate boom, it is difficult to find a buyer for your own property. If a house or a condominium has been on the market for a long time, it is recommended that the price go down: the real estate value goes down. To prevent this, you can exchange homes with a like-minded person from the same region.
- If your life situation changes again and again and you want to react flexibly to it, you can also consider exchanging homes.
- Those who advertise privately or simply switch on an internet platform save the costs of a real estate agent. What you, however not save, are Taxes and ancillary purchase costs, since it is actually a normal property purchase!
How does a property swap work? -The sequence:
First, the value of your house is estimated (valuation) – as is the value of the property of your exchange partner.
Although both properties should have roughly the same value, there will only be an exact match in the rarest of cases. So you can relate to one another with your counterpart Compensation payment some that the owner of the cheaper home has to pay to the owner of the more expensive home when the homes are swapped.
It is common to call in a lawyer to accompany the buying / selling process, drafting contracts, etc. He will also carry out all the necessary research, for example to check whether the house you want to buy has a mortgage. Your counterpart’s lawyer will do the same for your house.
Your lawyer will also need to make sure that you have the funds to pay off your existing mortgage. The other attorney will need a commitment from your attorney to pay off your existing mortgage. Similar considerations also apply to the person whose apartment / house you want to buy. There is no need, however, if you have already paid off your property.
The real estate may have to be sold and acquired with a delay. This means that the old real estate loan can only be repaid through the sale. Then the purchase of the new property takes place. The new property may also have to be financed with outside capital. You must of course obtain the relevant information from your bank in good time and present it to your contractual partner.
What are the hurdles to overcome?
The greatest challenge is to find a suitable exchange partner at all. After all, a wide variety of criteria must be met: the location of the house / apartment, layout, size, architecture and value.
It is therefore hardly surprising that the search for someone willing to swap with a suitable property can take a long time: months, maybe even years!
Carrying out a real estate swap therefore requires planning and patience.
You should visit property swap sites on the Internet that publish corresponding advertisements on a regular basis. At best, you create a search request right away. As mentioned above, brokers and banks can also help with the search by adding your house to their files. However, it is never certain whether they will find a suitable candidate for you.
LG Anne !!!
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