'Homes2Swap' website launched in new attempt to save transaction costs

A website has been launched this month called homes2swapwhere owners list their home online and swap them with the difference being paid as a cash settlement.

Homes2swap Managing Director Seamus O'Sullivan said the website could save sellers up to $NZ 20,000 in relestate agents fees. "There is a world wide trend -- also in New Zealand -- where there are more sellers on the market than there are buyers to buy them. There is probably over 1000 houses listed through private sale. There's certainly a market where people are looking to sell their properties without real-estate agents," said O'Sullivan, who is the former General Manager of the InterIslander and is also chairman of the Taupo Tourism Advisory board, "Spending upwards of NZ$20,000 on real-estate agents is a fair chunk of their equity. A normal house of about NZ$400,000 will cost close to NZ20,000 to sell. It is standard that a real estate agent will charge a listing fee and marketing costs. You're going to save fees of some where between NZ$15-20,000 on an average house," he said. Along with reduced selling fees, the website aims to grow the number of property transfers with same day transactions, avoiding losses through changes in the market between sales, O'Sullivan said.

"Because you're dealing in the market at the identical time, the relative value of the two properties been swapped remains constant," O'Sullivan told interest.co.nz. For swapping to work, people needed to be prepared to downsize, O'Sullivan added. "There needs to be a potential number of swappers who are as happy to down size as they are to upsize.  For that to happen we need one of the swappers to be prepared to downsize. As an example, you have people looking to renovate an older house or maybe do a piece of land up and subdivide, or a family struggling to service their mortgage, or baby boomers with big houses whose kids have left home." "The only market this is not targeted towards is first home buyers because they have nothing to swap and last home sellers because they just want to cash up, say if they are going to Australia, which seems to be common these days," O'Sullivan said. Barfoot and Thompson managing director Peter Thompson said a problem with the model of swapping properties is ensuring both parties have legal advice and are getting the best price for their properties. "It could be done, but one of the problems is with both parties getting the best price, how do they state the price and are they both getting the best rate for their investment when out in the market they might get more?"

The model of swapping house online is similar to private selling via the likes of TradeMe and requires more effort on the sellers behalf, Thompson said. "It might be saving commissions, but do they want the hassle of trying to sell the property themselves," he said. Homes2swap is not a licensed real estate company. Listing a home starts at NZ$39.00.