Like Buckmaster, I would presume the increase in permanent house swapping (also known as home exchanges) he has identified is to avoid the large sales commissions charged by the realtors and related documentation fees from the major banking institutions.
It’s not a particularly difficult thesis to grasp: Why pay a 6% sales commission plus documentation fees when you don’t have too? Right?
As someone who has bought and sold real estate in the past, I found using a realtor similar to a learned helplessness behavioral response. Primarily because I was fearful of my inexperience and agreed to go along with the highly overpriced process fearing I would make a mistake landing me in courtroom.
For example, when I sold my first home for a list price of $200,000 several years ago, I paid a 5% sales commission (I successfully negotiated down from the customary 6%), but I still lost $10,000 without blinking.
Because I told myself it was due to my recent move out of state and driving back and force would save me time and money. Which was true.
In reality, it was because I was too afraid to go through the process on my own and wanted an expert to guide me through the process. Nothing particularly wrong with this concept, but in a struggling economy, every dollar counts and it’s highly likely that Craigslist users have seen the light and have begun using their “do-it-yourself” mentality to their own financial benefit.
Quite a costly error on my part I’m afraid.
If you’re interested in pursuing a housing swap, I would suggest checking out the Craigslist location you are interested in moving to, and searching under “housing swap”. Find a home that you like, contact the owner, and if the deal appeals to your frugal nature, you can take the matter further.
However, being a safety minded person in a litigious society, I would recommend hiring an experienced real estate attorney if you are seeking a permanent home exchange with the transfer of titles, deeds, etc.
One other item of particular notice during the interview was Buckmaster reporting an increase of homeowners listing their homes for sale on Craigslist. Surprisingly, he claims these homes sell faster than using a traditional realtor. Perhaps this is due to the overwhelming popularity of Craigslist in general, and the “bargain seeking” ethos of Craigslist’s everyday user.
See the full interview in the video below.