Idaho Real Estate >> ID Real Estate Specialist

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Real Estate Exchanges >> Another tool often overlooked

With the Idaho Real Estate market changing along with the rest of the country it is those 5% of the 95/5 rule (yes, the 80/20 rule is history) that will survive due to "Thinking outside the Box".

I recently wrote a blog about how to correctly write Craig's List ads that can generate business and make sales.  Just like in print advertising, there are ads that do nothing and then there are ads that are lead generating machines.

There is another tool out there that has traditionally been used in farms, ranches and commercial real estate.  I am referring to "Real Estate Exchanges".  No, I am not referring to tax deferred 1031 exchanges.  I am referring to good old fashioned "trades".

In the mid 80's when mortgages were 17 ½% owner financing, wrap-around contracts, all-inclusive deeds of trust and "Real Estate Exchanges" were the only way to sell real estate.

Earlier this year I created a relationship with a builder.  He had 2 new spec homes that had been on the market for nearly a year with no luck.  I agree to co-list both homes and we were successful in getting the less expensive home sold due to having it staged and having the right buyer come along at the right time.

The more expensive home was another story.  This builder wanted to move this home and free up his cash flow.  I presented the idea of exchanging the home for a smaller home that would be easier to sell.  He spoke to his accountant and they both loved the idea.

I then wrote a new ad and posted it on Craig's List and I immediately received 5 emails and one call.   We now have an offer in place to exchange my builder out of an expensive spec home and into a less expensive home that should be much easier to sell and if does not sell will easily rent for more than the payment which the more expensive spec home would not have done.

The advantage is that one typically does not have to negotiate the price of your much at all, if any.   We were lucky to find a local buyer that had not even listed their home but have been thinking of a larger home for their family.  The exchange will benefit both buyer and my builder.

In real estate exchanges what one is basically doing is trading equity for equity.  Talk to your Title Company or attorney and find one that knows how to do a Real Estate Exchange.  If your closer does not know how to do them I highly recommend you find one that knows how to do them. 

Real estate exchanges are not hard to do and may be the tool you need to make a sale where you may not have been able to do one before.  How many sellers do you have that want to move down and how many do you have that want to move up? 

Exchanges are not for everyone but my bet is that every one of you out there as a sale or more that can be made by "Thinking Outside The Box" and taking a serious look at Real Estate Exchanges.

 

 Posted By: George Tallabas - Boise Idaho Real Estate Agent - Associate Broker 
with RE/MAX Advantage, Canyon Counties #1 Brokerage in sales and listings
specializing in Boise Idaho Real Estate and Southwest Idaho Real Estate.

Native Idahoan and Boise Idaho Real Estate specialist serving Boise, Meridian Eagle, Nampa, Caldwell and the surrounding Treasure valley area of southwest Idaho. Specializing in residential, investment, land and commercial real estate. Search thousands of MLS listings at Boise Homes for sale and learn all about Idaho by visiting Search Idaho Homes

Comment balloon 28 commentsGeorge Tallabas • September 16 2007 02:48PM

Comments

George,

That's a very unique idea and a great example of thinking outside of the box to get the deal done for your client. I hope you sell the smaller home quickly. Thanks for the info.

Posted by Andrew Trevino, Wilkes-Barre Homes For Sale (ADT Real Estate) over 11 years ago

I like it...thanks for this outside the box idea.

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Mission Grove Realty

Posted by John Occhi, SRES,CPRES.ePRO - Temecula-Murrieta CA Real Estate (Mason Real Estate) over 11 years ago

Yes, I like thinking creatively.  I have lived through bad times in slow markets in the 80's and different approaches are always helpful.  Thanks for the posting.  Have a great day!

 Ricki Eichler

Coldwell Banker Heart of the Hills, Realtors

Kerrville, Texas

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, e-Pro, TAHS (CastNet Realty) over 11 years ago
Hi George. This is a very interesting idea. Great post!
Posted by delete account over 11 years ago

George - "Exchanges" happen every once in a while here is SW Missouri. I've had a couple trade their piece of land to a builder for a new duplex. Usually it is someone wanting to get into town that initiates the "trade."

Posted by Debbie DiFonzo, Lebanon MO and Buffalo Missouri Real Estate (Debbie DiFonzo - United Country VIP Realty, SW Missouri) over 11 years ago

Andrew - Thanks for the well wishes

Rick - Thanks and congrats on making it through the tough times

Pamela - Thank you and make sure and keep your eyes open for the opportunity to do your exchange

Debbie - Good for you for "Thinking outside the box!"

Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

Good suggestion, George. Sounds a little like a barter system. Thanks for the idea - bookmarked for the future. I can see some possiblities with some properties  I have seen.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) over 11 years ago
Jeff - Thanks and good luck to you.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
George - I need to come to Idaho for training from the pro! Seriously - there are many great ideas you have shared and this is another great one. i will start searching for a Title Company now and would love more info.
Posted by Paula Henry, Realtor - Indianapolis Real Estate - 317-605-4174 (Home to Indy Team @ HomeSmart Realty Group) over 11 years ago
Paula - LOL....If you don't have a title closer that knows exchanges my friend you had better start looking.  I guarantee you that in a strong buyers market exchanges make a lot of sense. I hope all is well my friend.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

I've done a lot of exchanges, but never used it quite this way.  Thanks for the new idea.  On a side note, that Craig's list is quite a good source of business, isn't it?

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 11 years ago
Margaret - Thanks and have a wonderful day.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
George... I am a member of the Treasure Valley Exchangers club located here in Idaho. You might want to look them up and become a member. a lot of talented people are in the group with LOTS of Money too. These are a group of extremely creative people ready willing and able. Let me know if you would like further information. Congrats.
Posted by Donna Lueder, Meridian Idaho Real Estate (Integrity Group Inc. ) over 11 years ago
Donna - Thanks, I have heard of them before.  I have been doing owner financing, wrap-around contracts, all-inclusive deeds of trusts and exhanges since the 80's and have a title company closer I work well with. I have been doing well with it while 95% of the Realtors are waiting for the market to change.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

George,

Thanks for sharing another great idea - I had never heard of this one before. 

Posted by Rita Taylor, Sanford NC Real Estate - Homes for Sale in Sanford North Carolina (None) over 11 years ago
Rita - You are very welcome and good luck to you.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
George - I did not know about these exchanges, so thanks for bringing it out. It can be more important now then in the good old days.
Posted by Faina Sechzer, Real Estate Expert - Princeton, Montgomery ,Hopewell, NJ (Henderson-Sotheby's International Realty) over 11 years ago
Faina - You are very welcome and I hope this marketing idea can work out well for you.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

George

Really fantastic tips!  Thanks for sharing your ideas on how we can think outside of the box.  I love learning new tricks!!

Posted by Jeannette Morrison, Central Texas Real Estate, NW Austin, Round Rock (Cedar Park,Leander,Georgetown & Lake Travis Areas.) over 11 years ago
Jeanette - You are welcome and good luck in implementing this tip.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
Trading equity for equity.  I had a class on exchanges when I was getting my Certificate in Financial Planning. I forgot all about these.  Thanks for jogging my memory George.  I'll also have to check out your blog about posting Craig's list listings.  I think I'm thinking "out of the box" there but I'll have to make sure.
Posted by Tracy Santrock, Raleigh - Cary Realtor/Broker In Charge (Fonville Morisey/Santrock Realty Group, Inc. ) over 11 years ago
Tracy - You are welcome and feel free to contact me if you have any questions.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
George, thank you for this information. It is something that I was not even familiar with [in the mid-80s I was 10 ;)]. Immediately I thought of a builder who was FSBOing a home that would just not move. This could have been an option that worked for him. I work with some great escrow officers. I am excited to talk to them about this.
Posted by . . (no thanks) over 11 years ago
Bridget - I have done a lot of exchanges so please let me know if I can assist you in any way.  God bless.
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

Great idea!  Way to think outside the box.  We will need lots more of that over the next few years.

Posted by Bill Exeter, 1031 Tax-Deferred Exchange Expert (Exeter 1031 Exchange Services, LLC) over 11 years ago
William - Thanks and I wish you well
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago
Love the creative idea. I have a developer with 6 1 acre lots to sell. I'm going to approach him with the idea of talking to a builder who might have 2/3 specs sitting there & see if he's willing to trade. What do you think of the idea? There is a huge number of lots for sale in the area & I'm thinking perhaps it would be easier to sell a spec than the land? Thanks!
Posted by Kathy Robertson over 11 years ago
Kathy - Thank you and good luck with your transaction!
Posted by George Tallabas, Idaho Real Estate (RE/MAX Advantage) over 11 years ago

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