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Homeowners turn to online home trading sites
MIAMI -- Diane Peek needed to move from Georgia to central Florida, but for six months no one even showed interest in the house she and her husband built outside Atlanta.
In suburban Orlando, Andrew Bou needed to sell his family home to move to Atlanta, but also no luck. Peek and Bou each joined a Web site that matches people willing to trade their homes. They punched in their needs, their likes and dislikes and like two singles finding love on a dating site, they became a match. About seven months later, they swapped homes.
Peek and Bou are part of a small but growing number of homeowners who are turning to the Internet to swap properties. The sites -- there are about a dozen -- allow interested homeowners to browse potential swaps narrowed by giving preferences like price range, number of bedrooms and bathrooms, and city of choice. The homeowner also creates an account with the same information for others to browse.
"It was a wonderful experience for us," Peek said. "To me it's just a great thing with the housing market the way it is right now. It's a great way to hold on to your equity if you have to move."
But some experts say they don't expect online house trading to become a major trend because in most cases it's usually simpler to sell one's home, move to the other city and house hunt. Swapping also limits choices because the traders have to be swapping regions.
"I definitely know it's a growing market and certainly there are opportunities," said Paul Habibi, real estate professor at the UCLA Anderson School of Management. "I think these are still going to be one-off transactions and not the norm."
Brian Stroka, owner of onlinehousetrading.com, the site Peek used to swap her home, said the swaps aren't pure trades -- it's a little more complicated than that. Each party buys the other's home, getting a new mortgage. That gives a bit more flexibility as the homes can be of widely differing values.
On his site, it's free to post a proposed trade, profile and to look at properties. There is a $29.95 one-time fee for advanced searches and he makes money from advertising.
The Tampa entrepreneur has no way of tracking successful trades unless someone writes to thank him. He says his site is growing fast. He founded it in June 2007 and it has more than 50,000 profiles and gets about 75 new ones a day. It has also gone international with an additional 105 countries. He said he started his site after the "market started to get worse and worse and people couldn't sell their homes."
That's why Megan Seitz, a Detroit real estate agent, launched mkhomeswap.com in February. It has 270 registered users, who for a fee ranging from $20-$150 can trade, rent or sell their homes.
"Let's say they found another home who was listed for swap, they could contact each other. It's completed like a normal transaction," she said.
Michael Pastushkov, owner of besthouseswap.com, said the main difference between old-fashioned home buying and online swapping is "you cut out the middle man," often saving agent commissions.
But real estate agents use the method too.
Jose Bribiesca, owner of JB Realty Group Inc., in North Miami Beach, said that during Florida's housing boom sellers could name their price for their property, he said. There was no need to trade.
"Now there is huge supply and a low demand," he said.
He specializes in trading, posting his ads on Craigslist and other sites. He takes a commission if he is able to trade a property.
Some people use home swapping to buy vacation homes.
Myra Powell and her husband traded their beach property in North Carolina for a mountain house in that state "only because we couldn't sell it through it the normal way."
Powell, 56, who owns a social work staffing company and lives Wilson, N.C., said trading her own home took three months and a lot of negotiations.
"The trade process was much more about negotiation, relationship building with the party you are trading with," she said. "It was a problem solving process."
She is now friends with the couple who bought her home for $410,000. She ended up buying their home for $405,000. Both parties took mortgages on the homes.
Karen Rosenfarb, who traded with Powell, said the best way to trade is to be open as to location. Rosenfarb and her husband wanted something on the water anywhere from South Florida to North Carolina. They settled on Powell's home on Emerald Isle.
"It gives people another creative way of moving on without having to wait," Rosenfarb said.
Peek, who had been battling breast cancer, had been living in Georgia with her daughter. Her husband was living in central Florida during the week and traveling home to Atlanta for the weekends. She originally wanted to sell the home, but was willing to do a trade. She traded her $340,000 home to Bou for a home appraised at $380,000 in the Orlando suburb of DeLand, but she did an even trade so didn't pay anything over.
The Bous and Peeks drew up contracts, had home inspections and they signed a purchase agreement, promising $1,000 if either party backed out. They both used the same Florida mortgage company, which sped up the process. She looked at the new home the last week of April 2008 and they closed a month later.
Now, she is looking to trade the DeLand property and move to the Florida Panhandle, where she and her family were before moving to Georgia.
She has a listing on Stroka's site and another on goswap.com, but she is not willing to swap it at half price -- that's how far prices have dropped in her neighborhood in the last year. So unless she gets a comparable swap, she'll wait.