Trading - Part III

2009/03/04 Originally published in the Vernon Morning Star.

In my previous columns I briefly discussed the concept of trading and explained something of how a basic trade in real estate works. I thought I'd like to expand on the idea of a four way or multiple trade.

Firstly, it takes a lot of research by the concerned Realtors®. To get a chain of Sellers and Buyers exchanging each others' properties, the Realtor® would normally start with one of their Sellers' lists of needs and wants. The Realtor® would first consult all Multiple Listing Service listings to see if any matched or were similar to those traits described by their Seller (who would then be a Buyer).

Usually, the listing Realtors® indicate on the MLS listing data forms that their Seller will consider a trade, but sometimes they don't. So, whether indicated or not, the Realtor® who is attempting to find the suitable trade property must make calls to all the listing Realtors'® whose listings might possibly suit the trading Realtor's® client.

This is where it begins to get interesting. Let me try to outline a four way trade. Mary wants to move into a gated community. But firstly she must sell her big house on the East Hill. Joe currently owns an apartment style condominium and would like to buy a little house close to downtown with a small garden area and a place to park his new RV. Ellen owns a well cared for home in an adult community but wants to move to a smaller apartment condo within walking distance to shops and services. Geoff has a growing family and would like to buy a four bedroom larger home to replace his little starter home. So, Mary will ultimately buy Ellen's gated community home. Ellen will buy Joe's apartment style condo. Joe will buy Geoff's little starter home and Geoff will buy Mary's big house. We call this trading but in fact it's really a large exercise in coordination.

It requires a significant amount of dedication and research on the part of all Realtors® concerned but it is a useful tool in a market when Buyers may be hard to come by.

In all trades that are of unequal value, which is most of the time, each buyer will either have to have cash or mortgage funds to make up the difference.
In doing the real estate transactions via trade or exchange, some minor concessions or compromises may need to be made. But at least the Buyers and Sellers involved can get on with their lives in the general direction they desired.

Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email her or call 503-3755.

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