I have a possible swap and need some help/advice

**TripleAAA** · 11-16-2009, 11:31 AM

This is my first post here and I apologize if it's been covered, but I did a couple searches and didn't find anything that specifically addressed my situation.

I currently own a 3 bed, 2 bath very "cookie cutter" home that I've been looking to get out of for primarily one reason, and that's location.

After looking at some property closer to where I work (very close, in fact) I came across a downtown "loft" that is only about 3 years old. I contacted the realtor to see if the clients he represented might be interested in doing a swap deal. It just so happened that they were open to the possibility and came and looked at my property.

Without going into too many details at this point, here is what would be swapped:

My 4 year old, 3 bed/2 bath, very typical suburban home with a fenced in backyard in a nice neighborhood.

I would get in exchange a 3 year old, 1 bed/1 bath studio "loft" that is in a perfect location for my needs.

The loft is has been on the market for about 6 months. I have not listed my home, nor am I in a huge rush at this point to move or sell however this is an appealing opportunity. I'm single, 29, and don't live in much of my house nor need much of its amenities. The main drawback is the space as it's quite small and I have to consider HOA fees among many other more minor concerns.

The ideal "deal" for me would be to swap my home in addition to obtaining 5-10k in cash. Since the loft has been on the market and the owners are wanting to sell it, they would find a buyer (me), and also obtain a property that would appeal to a larger demographic in this area.

So that's it in a nutshell....my questions are this.

What would be the best way to go about doing a transaction like this in order to save everybody involved the most money?

If the owners of the loft owned the property outright and I have a mortgage on mine, what would be a feasible way to get the deal done? Would they assume my loan...would I "sell" my home to them and I would "buy" their loft?

**Chrisopher Moltisanti** · 11-16-2009, 01:53 PM

Why are you concerned with saving them money?

If they're interested in this swap, hire an attorney to do the closing and ask them the best course of action to take. I.e. -having them assume your mortgage or not.

CM

**TripleAAA** · 11-16-2009, 02:08 PM

I guess my philosophy on "saving them money" would mean that overall I would save money as well because they may be more inclined to take an offer that is more advantageous to my situation.

I have no idea how much an attorney would cost for something like this? Would it be based on an hourly rate or just a flat fee for paperwork process?

Thanks for your input!

**Chrisopher Moltisanti** · 11-16-2009, 02:24 PM

Attorney's usually do a closing for a flat fee. If you have general questions (before you even bring a deal to their desk), in my experience, they'll accept a hundred dollars cash and you'll get like ten minutes to ask all the questions you want. Just be concerned with yourself man. Don't try and sweeten a deal too much: It makes you look desperate and most buyers will take advantage of that.

CM

**VegasAgent** · 11-17-2009, 09:53 AM

There is already a real estate agent involved in this transaction that will need to be paid, so why also hire an attorney unless that is customary in your area for closings? This Realtor can write up the contracts as per the instructions of both parties.

There is really no such thing as a "swap" if one or more parties has a mortgage on the property. Mortgages originated after 1989 contain a "due on sale" clause, meaning they must be paid off if the property is sold UNLESS the bank specifically allows the new buyer to assume the existing loan WITH qualifying. You will need two separate contracts, one for each property, but each contract would be contingent on the other party selling and buying simultaneously. If one or more parties need to get a mortgage, the contracts would also be contingent on financing.

Also, it may be ideal for you to sell them your home plus get some cash in hand, but values will be determined by appraisals if financing is part of the picture. The first step would be to sit down and figure out what your property is truly worth (making sure not to go over appraisal value in case the other party needs a loan), then figure out what you would like to offer the other party for their loft as part of this concurrent transaction. Then phone the agent who has the listing and ask them to write up contracts that can be presented to the seller. (They have already indicated their willingness to listen to a proposal, so now it is time to show you are serous by putting it in writing.)

**Greg** · 11-17-2009, 11:31 AM

You buy their loft and they buy your house. Your existing loan will have to be paid off and you will have to get another loan to buy the loft. 2 contracts contingent on each other, 2 loans, 2 home inspections, 2 appraisals, 2 sales and your done. There are already 2 agents involved, let them do the work.

**TripleAAA** · 11-17-2009, 02:40 PM

Thanks for all the help on this. My home is not currently listed, so there is only one agent currently involved in this deal...that being the agent representing the loft.

My concern with this one realtor doing the transaction would be if he/she wanted to charge a commission on my home. Would this apply here or how could I get around that?

The contingent contracts make sense and keeps everybody safe so that's probably the avenue I would take.

It sounds to me like the loft might be owned outright in which case I would be the only one having to get a new mortgage.

**TripleAAA** · 11-17-2009, 02:41 PM

Originally Posted by VegasAgent

There is already a real estate agent involved in this transaction that will need to be paid, so why also hire an attorney unless that is customary in your area for closings? This Realtor can write up the contracts as per the instructions of both parties.

There is really no such thing as a "swap" if one or more parties has a mortgage on the property. Mortgages originated after 1989 contain a "due on sale" clause, meaning they must be paid off if the property is sold UNLESS the bank specifically allows the new buyer to assume the existing loan WITH qualifying. You will need two separate contracts, one for each property, but each contract would be contingent on the other party selling and buying simultaneously. If one or more parties need to get a mortgage, the contracts would also be contingent on financing.

Also, it may be ideal for you to sell them your home plus get some cash in hand, but values will be determined by appraisals if financing is part of the picture. The first step would be to sit down and figure out what your property is truly worth (making sure not to go over appraisal value in case the other party needs a loan), then figure out what you would like to offer the other party for their loft as part of this concurrent transaction. Then phone the agent who has the listing and ask them to write up contracts that can be presented to the seller. (They have already indicated their willingness to listen to a proposal, so now it is time to show you are serous by putting it in writing.)

Another way of looking at it, is what would the realtor costs be versus having an attorney just do the closing paperwork/contracts? Am I even looking at this right though?

**Chrisopher Moltisanti** · 11-18-2009, 03:00 AM

"There is already a real estate agent involved in this transaction..."

"...My home is not currently listed". -I knew I wasn't seeing things.

"...what would the realtor costs be versus having an attorney just do the closing paperwork/contracts..." -That's what I was trying to say. If what Vegas said is true (and it probably is), (It probably is Martin, it probably is, but the fact of the matter is the bite radius on this animal is different than the wounds on the victim). -another great movie......have an attorney draw up the paperwork and simply swap them out. You & the buyer(s) would assume each other's mortgages. Done, no big deal, no novel length explanation.

An attorney would have this paperwork to you and the buyers in an afternoon provided they have all the details and paperwork at the ready.

Good luck and we're all counting on you and please stop calling me Shirley.

CM