Q: I moved away from my hometown about a decade ago and want to move back home. My cousin wants to move to where I live now, and we think it would be good to swap our homes. Can we do this? —Miriam
A: Yes, but there are plenty of details that will need to be dealt with.
While it is rare, house swapping, done correctly, can take much of the worry out of the process out of selling your home and buying a new one.
You can avoid streams of potential buyers visiting your home and avoid having to spend many weekends looking for your new dream home.
The process is much like a traditional home purchase. You will need to prepare two purchase contracts, one for each property, making sure to have each contract contingent on the other and set the closings for the same day.
Even though, or perhaps especially because you are family, it is essential to do your due diligence on your new home.
It would be best to have the homes appraised to ensure it is an even swap. If the properties are worth different amounts, the owner with the more expensive home can be paid the difference at closing.
If both houses are owned free and clear of a mortgage, no money has to change hands other than to pay for transfer taxes and closing costs.
Any mortgages on each property will need to be paid off, and you might need to get a new mortgage to do so. Some lenders can work with this uncommon type of transaction, but you may need to shop around to find one that can.
Treat this deal like you would a more traditional one. Have a thorough property inspection performed, get a title search, and arrange for title insurance just like any other closing.
