Let's swap homes

Special to The Times

Danny Bragg and his wife, Danika, who own a modern, four-bedroom home in San Bernardino County, are thinking of moving. They're just not yet exactly sure where.

He would like to go back to Texas, specifically to the Woodlands, a town less than 30 miles north of Houston and close to where he lived before moving to California 11 years ago.

Danika, 40, a California native and executive assistant at a civil engineering company, is less keen on Texas. She would prefer somewhere within 50 to 80 miles of where they are now, still close to her mom and work but on the coast.

Danny, 37, a home-based regional insurance sales manager, also loves the beach and sees coastal California, like small-town Texas, as a great place to one day raise kids.

How the couple resolves the issue could depend partly on the emerging practice of home swapping. Through the website Pad4Pad.com, they are hoping to find someone in Texas or California willing to trade for their 1,600-square-foot, four-bedroom home in a gated community in Highland.

For years people have been swapping homes for vacations. Today, the idea of permanent exchanges is gaining support among disillusioned property owners struggling to sell in a glacial real estate market.

Although the number of completed trades isn't being tracked, interest is such that several home-swap websites have sprung up in the last year and now claim close to 40,000 combined swap listings nationwide. Others appear regularly on Craigslist.org.

The wait

The Braggs' home has been on the market for about six months -- the price now reduced to $350,000 from $380,000. "We've exhausted a lot of options," said Danny Bragg, who was searching online when he came across Pad4Pad.

"The concept seemed like a good idea," he said, adding that they've had three serious inquiries so far through the website, though not yet a firm proposal.

Though the number of swap listings is still a small fraction of total property listings, website operators are confident they have hit upon a simple way to help ease today's market woes -- matching buyers and sellers.

"It's like a dating service for home sellers," said Greg Holt, chief executive and co-owner of Denver-based Pad4Pad. "We're bringing people together."

From St. Augustine, Fla., Sergei Naumov, creator and owner of GoSwap.org, agrees. "The concept works as simply as: 'I will buy your house if you buy mine.' "

These websites, along with others such as OnlineHouse Trading.com, DomuSwap.com and DaytonaHomeTrader .com, say once potential swappers feel they have the makings of a match and begin negotiating, they are on their own and the process runs much like any other real estate transaction.

Having decided to swap homes, both parties need to agree on the value of their respective properties and secure fresh mortgages. Any difference in value will be paid either in cash or by using funds from the new mortgage.

A familiar process

Sites advise swappers to follow the usual steps of any property transaction, which might include visiting the property, employing the services of an appraiser and home inspector, and perhaps hiring an attorney or real estate professional to shepherd them through the closing process.

Pad4Pad's Holt said because both parties have already connected, he has found real estate agents willing to assist for a flat fee of about $700 instead of more costly percentage commissions.

Sites also suggest that people share the same title company to ensure that both deals go through simultaneously and that nobody is left holding mortgages on two properties.

Fees at the fledgling sites vary -- some charge nothing, others a one-time payment of $19.95, or $20 per month -- as owners initially focus more on building subscriber numbers than on revenue. Some plan to hike fees later, though most see greater earnings through advertising and links to real estate-related services such as mortgage companies, title insurance, banks, real estate agents and home inspectors.

Although the recent development of these websites has put home swapping within everyone's grasp, it was a different story just a few years ago, when Jerry Stussman, using a combination of real estate contacts and sheer good luck, got started.

Stussman, a self-described "guru" of home swapping, is a 67-year-old retired designer of electronic medical equipment who has successfully completed three such deals.

Four years ago he stitched together a package using four rental properties in Thousand Oaks to help acquire his current home in Westlake Village.

About 18 months ago he swapped two rentals in Texas for one in Westlake Village; and last December he swapped a home in Thousand Oaks' old town area, where he saw it steadily losing value, for one in Virginia, where he thinks the market has stabilized.

Stussman disputes the need for a real estate agent, attorney or other third party to help close the deal. "That's a waste of money," he said, arguing that the use of standard contracts and loan procedures, title companies and third-party escrow is protection enough.

However, he does support the idea of both parties using the same loan, title and escrow companies, when possible, to help deals slide through as seamlessly as possible.

Stussman, who with his wife, Lynn, owns a dozen properties, would like to downsize their portfolio but cannot sell in the current depressed market. So the next best option is swapping, which he believes has some advantages.

Saving commission fees is one: For example, Stussman said he and the owner in Virginia each saved about $30,000 when they swapped.

However, that's not the main motivation.

"It's a question of taking control of your life," he said. "Right now nothing's selling anywhere. Swapping is just another alternative."

E-tours and e-photos

Swappers list their homes online, usually with photos and perhaps virtual tours and videos, along with a description of what they're looking for, the location and price range.

Website owners complain that real estate agents have been slow to see the potential of home swapping. DomuSwap creator David Moskowitz said about 90% of his listings are made up of people selling their own homes, with a high proportion from Florida, Arizona and California, states hit hard by the housing downturn.

GoSwap's Naumov has about 150 listings from owners willing to trade anywhere in the U.S. rather than to a specific location.

"I think that's a sign people are so fed up with this market," he said. "Or perhaps they're retirees and prepared to look at any option."

Hoping to trade up

Although Highland homeowner Bragg is hoping to swap for something 50% bigger in Texas, things could work the other way around for Kerrin Pease, who's looking to exchange a home in Boise, Idaho, for one within commuting distance of his Santa Ana workplace.

Pease and his wife, Glen, who are now renting in Orange County's Aliso Viejo, own a 5,000-square-foot, four-bedroom, four-bathroom home on 2 acres in Boise. The house is on the market for $649,000 and swap-listed at OnlineHouseTrading.

He thinks any exchange here will likely be for a home about half that size, with a quarter of the land and require additional cash to offset California's higher values.

Self-styled swapper Stussman, recalling the many deals he has explored that fell apart, recommends a good measure of perseverance.

"It's by no means simple to find the right match," he said.

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Home swapping on the Web

For more information on home swapping, go to:

* www.pad4pad.com

* goswap.org* www.onlinehousetrading.com

* www.domuswap.com

* www.daytonahometrader.com

-- Frank Nelson

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The home exchange: What's on offer

Several websites have sprung up to connect owners interested in house swapping. Listings, such as these at GoSwap.org, can include a variety of details.

Los Angeles

Value: $583,000

Bedrooms: Three

Baths: 2 1/2

Square feet: Not listed

Will swap for: Two- or three-bedroom condo on the Westside. Other locations: Oregon, Arizona, Washington. Downsizing.

Norwich, Conn.

Value: $359,000

Bedrooms: Six

Baths: Three

Square feet: 3,200

Will swap for: House or condo in or around Bucks County, Pa. Willing to downsize, swap even, upsize or consider owner financing.

North Miami, Fla.

Value: $800,000

Bedrooms: Three

Baths: Two

Square feet: 2,400

Will swap for: Single-family home in Baton Rouge, La., or Dallas.

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Reno, Nev.

Value: $290,000

Bedrooms: Two

Baths: 2 1/2

Square feet: 1,774

Will swap for: Residential property in Colorado: Boulder or surrounding area; Golden or Arvada.

Source: GoSwap.org

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