Trading houses instead of selling: Does it work?

Trading houses instead of selling is a hack that can help you generate a couple of extra dollars, besides being able to visit other regions or countries. Whether you’re looking to temporarily swap houses or trade homes more permanently, the process has become an increasingly popular alternative in today’s real estate market. In this blog, we explain how house trading works and what you need to know to make it a success.

What is it called when you trade houses?

The term for home exchange is “home swapping”. This is a process in which two parties agree to exchange their homes for a temporary period, usually for a vacation or extended stay in a different location. Home exchange can work directly between individuals or through a home exchange service that facilitates home exchange. It is a very popular way to travel and see new places without the cost of renting accommodation. Popularized by the movie The Holiday, this approach offers a cost-effective way to travel without paying for accommodation. If you’re buying or selling a home and considering alternatives, house trading could be a good idea.

How do you trade houses instead of selling?

Trading houses instead of selling is a straightforward process to exchange their homes for a temporary period. Here’s how it works:

Find a House-Swapping partner

There are different ways to find a house-swapping partner. You can use online house-swapping websites real estate agents, social media groups, or even by asking friends or family if they know anyone interested in swapping homes or join a house-swapping club. 

Discuss the details

Once you have found a potential house-swapping partner, you need to discuss the details of the exchange. You should agree on the dates of the exchange, the duration of the stay, and any other important details.

Finalize the agreement

Draft a written agreement that outlines the terms of the exchange. This document should include details about the home’s condition, rules, and any potential costs, such as sharing utilities. It’s also essential to confirm that both parties meet any credit score requirements, which can sometimes be part of formal home trades. Any rules for the exchange, and any financial agreements, such as whether you will exchange money for utilities or other expenses.

Prepare your home

Before the exchange, you should clean and prepare your home for your guests. You should also create a list of instructions for your guests, such as how to use the appliances, where to find extra linens, and any other important information.

Enjoy your stay

Once you arrive at your exchanged home, enjoy your stay! Remember to treat your host’s home with respect and leave it in the same condition as you found it.

Swap back

At the end of the stay, both parties return to their original homes. It’s good practice to ensure everything is in the same condition it was when the exchange began.

What is trading in real estate?

Trading in real estate typically refers to the acquisition and disposal of properties for financial gain. Real estate trading can involve purchasing and selling assets for both short- and long-term investments, such as flipping a house or buying and renting out real estate.

Individual investors or firms that focus on real estate investing might engage in real estate trading. These investors might buy homes to make modifications to raise their value or hang onto them for long-term appreciation and rental revenue.

It may also entail trading properties in a 1031 exchange, commonly known as a tax-deferred transaction. If certain transaction conditions are met, an investor can sell one property and use the proceeds to purchase a different property without having to pay taxes on the gain from the sale of the first property.

Read more: Why are there no houses for sale?

What does it mean to trade a house?

To exchange or swap one’s own home for another’s home is to trade a house. This can be done for a short time, usually on a trip or a prolonged stay somewhere else.

In a house trade, two people agree to swap their residences, enabling each to take advantage of a new location without having to pay for lodging. This can be an excellent method to reduce travel costs and experience a new location like a local one.

Trading houses instead of selling can be done directly between individuals or through a house-swapping service that facilitates the exchange. Both parties agree on the terms of the exchange, including the dates, duration of the stay, and any other important details. Normally, the parties do not exchange money, but there may be some agreement on sharing utilities or other expenses.

Read more: Can a realtor sell their own home?

Is House Trading a Good Idea?

Trading homes instead of selling can be a creative and practical alternative, especially for those seeking to minimize costs while experiencing new locations. It works best for those with flexible needs and a solid understanding of how real estate transactions operate. Whether you’re considering this for short-term vacations or more long-term arrangements, house trading can be an excellent option, especially when working with a reliable real estate agent to guide the process. For those with good credit scores and an interest in unconventional real estate solutions, house trading might just be the perfect fit.

Written by Vanessa Gallanti. April 5, 2023

Enthusiast about planning, project management, construction materials and technology, and construction. A civil engineer from Los Andes University and a content writer for Kukun.