Sell Your House Fast- Exchange it
If you want to sell your house fast- Exchange it.
Most of us have exchanged our clothes that didn’t fit, exchanged a car for one with more room or fit a change in our life at the current time. Why can’t we do the same with a house…? Oh wait, WE CAN! You can sell your house like everyone else and get the same results as everyone else or you can take a lesson from your ancestors and do some “horse trading”. We buy houses for personal use most of the time. That’s the benefit we are looking for, the use of the house. The one constant in our life is life changes. So what are the chances that the first house you buy will be the only home you ever buy; not likely. Losing a job can force you to move into a cheaper house. A baby can make things go the other way. Many professionals will argue whether your personal house is an asset or a liability. If you can exchange the house you live in for one you like better, that sounds like an asset to me and it’s an asset most people don’t utilizes. Unless you live in your current house for ten years or more; or are in a market like we had before 2008, you’re not going to make money selling your house. Then the house is a liability.
Tax law has a regulation called a 1031 exchange (like-kind exchange).
This law use to allow people to trade properties close in value, deed for deed, with no taxable event. Most people sell their house, put the money in a 1031 account, and then go look for a new house to buy before the 90 day time limit expires. You don’t need a 1031 when two seller that want to trade are standing in same room ready to do business. Houses can be traded like baseball cards which allows homeowners the chance to sell the house they have for a house that fits the next stage in their life with less trouble and sometimes with no cash needed.
I have a friend in Florida that helped a client trade his 3 bed, 2 bath house for three 2 bed 1 bath houses. Why would he do that? The client was a widower and his house was too much to maintain. The client also had a retirement fund that was running out of money fast. He traded with an investor (because the investor liked 3 bedroom houses more), and got a house that was easier to maintain, cheaper to live in and two houses next door which he rented for an income to save his retirement fund. WIN-WIN.
I’m working with a client in Georgia now that wants a house in Arizona to be closer to family. We will find a house she likes and trade for her house in Georgia. There are countless ways to trade a house and move the equity you have built up into a house that fits your current life without losing 10-15% of your equity in realtor fees and fixup costs. Many retirees want to down size to a smaller house in the warmer states for a family house in the northern metro areas. Students starting a career may trade their condo for a ranch house in the suburbs. The list goes on and on.
“I’m not trading my $250,000 house for a $110,000 condo”. YOUR NOT. Remember I said “close in value”, you can trade multiple assets. Trade your house and a boat to go with the beach front property. Trade two smaller houses for one larger house. The bank makes money loaning money, you can too. Trade that $110,000 condo and a mortgage note (promise to pay) of $140,000 for the $250,000. The payments are cheaper on you and they sell their house at full asking price and get a monthly income. WIN-WIN again.
Value is really in the eye of the beholder. Market value is just a reference point. If you like a sellers house more than the one you are in, find a way to trade. Like my mentor says,” If I had a single scoop of ice cream you love and you had a double scoop of ice cream you don’t like, would you trade with me?”. It can be faster and cheaper than the old way of; sell, get a loan and find another. Good luck