by Neil Webb/Getty Images
Candy Slane can’t resist the bargains she digs up on Craigslist – wood for her family’s fireplace, a loft bed for her daughter, a tractor. Yep, a tractor.
There’s not much that isn’t sold, bartered and traded online these days, which might be darn good news for folks who also need to unload some real estate. And that’s exactly where Slane finds herself. Her albatross is a three-bedroom, two-bath unit at the Embassy Condominium complex in West Bend – her husband’s former bachelor pad – that she’s been trying to unload for about 2 1/2 years. Why not put it on Craigslist?
“You see these shows like ‘Barter Kings’ where people are swapping for this and that,” she says. “They start out with a bat, and in the end they get a hot tub.”
About a dozen ads are posted each month to the “Housing Swap” category in Milwaukee’s corner of Craigslist. They’re not always house-for-house or condo-for-condo deals. Sailboats, bars of gold, retail businesses and cars are also put on the table. Slane’s proposed trade, on the other hand, was deliberately vague, as she asked to trade the Embassy condo for a “small home or duplex in the West Bend area.”
“It’s probably a shot in the dark, but you never know,” she says.
She’s already tried the Golden Rules of selling a home: listing it with two real estate agents and slashing the asking price again and again. But even as the listing sank to less than $70,000, the number of interested shoppers fell off sharply, maybe because Embassy had converted to a 55-and-up community. “In the beginning, we had some showings,” she says, “but in the last six months, we had one.”
Jewelry, gold bullion, boats, cash, shares of company stock, cars, rental properties – all can be applied to a down payment. “Do you think that anybody would not accept gold bars as payment?” says Steve Smullin, a northern Illinois real estate agent who recently put on two housing-swap seminars in southeastern Wisconsin. “Would you use a Monet to buy a mansion? Would you use 10,000 Google shares to put a down payment on your daughter’s first home? Sure, why not? We need to adjust our thinking away from paper.”
Smullin recommends aspiring traders design a brochure outlining step-by-step the kind of swap they want to make, and that they bring this custom-tailored literature to open houses. Real estate investors have long traded properties, he says, including the very island of Manhattan, which was legendarily swapped for beads in the 17th century. “The reality is that anything can be used to buy or sell real estate,” he says. “It changes the landscape of dollars and cents to people’s goals and motivations.”
In such a buyer’s market, if you want to sell, “Sometimes you just have to get creative,” says Andrea Johnson, owner of Encompass Realty Group in Milwaukee. After hearing a fellow Realtor chat about trades that took place 20 and 30 years ago, when interest rates were sky-high, she listed a 5,000-square-foot Lake Country house on Craigslist. For swap, she’s seeking one or more rental properties.
Even when a trade looks like a win for both sides, there’s a drawback to keep in mind, according to Johnson. Swaps are subject to the federal capital gains tax, which varies based on the particulars of the sale.
If you’re not interested in engineering your own real estate trade, New Berlin’s Bob Rainek might do it for you. A veteran house flipper (he claims to have bought and sold more than a thousand), Rainek advertises a middleman service on Craigslist. In late summer, he said that it had produced about 15 calls, though no trades had yet “come to fruition.” He offers to trade Milwaukee-area homes for ones in the Florida cities of St. Petersburg or Tampa, ultimately earning a tidy little profit for himself in the deal. “A $250,000 Brookfield home translates to a waterfront home in Tampa or [St. Petersburg],” he says.
As good as this sounds, even he admits that house-swapping is usually a last resort. “Nobody is calling me that’s been able to sell their house the traditional way.”