This article originally appear in Wall Street Profit News on February 2, 2008
Can’t Sell Your House? Swap It!
By David Moskowitz, creator of Domuswap.com
I don’t need to remind the readers of this site about the current housing crisis.
Housing is considered a basic human need, along with food and clothing. By the way the housing market has shut down you would think we were talking about tulips.
You might not say the market has crashed, since prices haven’t come down all that much, about 7% since last year. This would not even be considered a bear market in stocks at those prices. Even the 20% or so decline in prices from their highs a few years ago would seem like a minor bear market if applied to the stock market. But in the stock market analogy, even in a down market, sales can still remain high. This is not the case in the housing market. Sales have all but stopped, or so it seems from my vantage point here in Florida.
New home sales dropped 26% last year. The previous record was 23% in 1980. (AP)
A recent article in the Wall Street Journal quotes a Phoenix Realtor who says “For now, people trying to sell homes ‘done have a prayer’ in competing with lenders offering foreclosed homes and builders dumping excess inventory. (WSJ)
So the problem is a lack of buyers, to state the obvious. Since housing does have some intrinsic value, most sellers are still holding somewhat firm on their prices and not liquidating at fire sale levels.
So the problem I’d like to address is the fact that no one is buying. I’d also like to propose a solution.
What is a homeowner to do? How can someone compete with foreclosures, short sales, and builders unloading inventory. Don’t forget about auctions. Every buyer today seems to have the expectation of buying for next to nothing.
What if you absolutely need to sell your house for good reason, such as job relocation or a change in life status causing the need to upsize or downsize. I am not talking about investors whose latest flip was a bust. I am speaking about Joe average homeowner.
For this group, I propose that a solution lies in swapping your house. I see swapping as perhaps the only solution to save the average homeowner who needs to sell their property.
I was in this position myself, wanting to relocate from our current house to a smaller condo within the same market. Taking the typical route of listing with a Realtor, while looking for a new property, eventually got wearisome. There was no point looking for a new property, since I could not purchase one until I sold my current house. And nobody was buying.
The solution that came to mind was to see if any of the properties I was interested in would consider an exchange. Out of the few properties we inquired on, there were no takers. But what if we expanded that small handful to include all properties listed in the county. Or the country. By creating a large database of home sellers, we could likely facilitate matches. One need not find with their “ideal” match, only one “good enough“ , one that’s puts them in a better position than they are now in.
While not previously done for housing, this should sound an awful lot like a dating service. And it is essentially the same.
Since then, I‘ve created Domuswap.com. We currently have about 1800 listings and have facilitated successful trades.
The focus of Domuswap is on automated computerized matching. Once we know what the owner has to sell, and what they are looking to swap for, we match them with other sellers who want their property. We provide users with three lists of Matches (what they want), Seekers (who want them), and Connections (they want each other). Since this is all computerized, we can also calculate multi way swap, such as three way trades. These reports are emailed daily to our users.
Currently, most of the properties on Domuswap are listed by individual owners. However, I promote Domuswap as just another method (but more relevant today than ever) to sell houses. As such, Realtors should definitely consider Domuswap as a supplement to their other marketing efforts, since it opens up a new market of buyers who can't buy before they sell their existing property first.
Another trend I see is home builders accepted trade-ins, similar to a car dealer. Builders can unload a more expensive property, and may have the experience to manage as a rental or redevelop and existing property. Just like a car trade in.
I invite all readers of this web site to visit Domuswap.com. It is a free service. I’d also love to get your feedback on our approach to house selling.
David Moskowitz is the creator of Domuswap.com, an online matchmaking service for real estate swaps, and president of Infoblazer LLC, a computer software development and consulting firm.