Thoughts on Trading Real Estate

Back in June of this year, I posted a video on trading real estate. The idea for a video came to me in discussions with a client about selling his acreage. Without excluding the possibility of a traditional real estate sale, he was interested in trading his property as well. This is the property, a beautiful acreage close to Regina, Saskatchewan. Here’s the video about trading real estate on the McDougall Real Estate Auctions YouTube Channel. And, for good measure, here’s a video about the property, which is still for sale or trade.

Of course, people are always looking for ways to sell their properties. And, trading real estate is one way to go about it. Personally, I find the idea of real estate trading to be creative. In a real estate trade, two parties come together and arrive at an agreement about the value of each other’s property. Once that agreement is reached, the two parties purchase each other’s property concurrently. The transaction usually boils down to a swap of properties and cash differences between the agreed upon values of the two properties. If one property is worth more than the other, there is a cash component to the transaction to make up the difference. Each transaction closes around the same time.

It’s easy to spot the benefits. With concurrent closing dates, moving dates are coordinated, eliminating troublesome gaps in time between moving out of the old residence and moving into the new one. In the western Canadian context, there are other advantages as well. With real estate markets effected by commodity prices, we are sometimes compelled to sell a property at a depressed price. By trading however, the owner can preserve his or her property’s value by negotiating appraised values, rather than being forced to accept a deflated value caused by economic factors beyond our control.

Needless to say, equity considerations come into play, and it’s not always possible to make a trade due to financial considerations. Still, it’s an avenue worth exploring, especially when it creates an elegant solution that brings buyers together around shared interests.

From my point of view as a REALTOR?, a trade must be treated with the same prudence as a traditional transaction, and perhaps more, depending on the properties under consideration. But, the great thing is that it allows two sellers to arrive at a sale of their properties and reach a creative purchasing solution together.