Homebuilder offers to swap me out of my house, if I buy their home.

[cougarfreak]

I am in a so so neighborhood, and have had my house up for sale for about 6 weeks. Recently, a homebuilder approached me, on the suggestion of my realtor, and inquired about swapping me houses (they buy mine, I buy theirs). The house I was offered is in the neighborhood that I wanted to go to, and is on a lot that backs up to about a 150 acre farm that will not be sold anytime soon. Needless to say, I'm ecstatic, and after the final, final, final loan approval comes through in a week or so (I've been told it's not a problem at all), I'll be closing in the middle of June. I'm not dumb enough to think the builder isn't making money on the deal, but I really feared my house sitting on the market for 6+ months. So, my family is moving into it's dream home in a little over a month.

Arlinghaus Builders Market Home

[M GO BLUE!!!]

I can't wait to bathe in that tub!

What's the address?

(Congradulations!)

[Draft Dodger]

why does the builder do this?

[cougarfreak]

Originally Posted by Draft Dodger

why does the builder do this?

I would assume.........he's making money. He had already discounted the above home about 13K, but he's got to be. In the Northern KY area, houses that are about my asking price (in the 112K range) are moving faster than houses in the price range I bought (about 215K). That's all I can figure. I'm seriously ecstatic about the deal. And to boot, the house is an energy star home, with Rannai tankless water heater, dual fuel heating/cooling system, low E glass, etc.

[kcchief19]

Originally Posted by Draft Dodger

why does the builder do this?

Inventory and cash flow primarily. Let's say they are selling Cougar cost $195,000 and they're selling it to him for a discounted price of $210,000. The builder's carrying a short-term construction loan on that house that's going to probably be a little around prime or so. They are unloading that house with a higher rate loan while picking up cash and a cheaper house that they can finance at a lower long-term rate. Now the builder can either flip it or keep it for rental property. It's not a process that every builder likes to do especially in today's market because more than likely they'll be carrying as a rental for while.

Coug, I do wish you congratulations but I also encourage you to check out the deal very thoroughly -- you might even had a lawyer look over the paperwork. I work with a lot of builders who take homes on trade and 99 percent are on the up and up. But these types of arrangements are ripe for fraud. We had a developer in our area who did some deals like this but they made the buying of the home contigent on finding a buyer by a certain date. If they didn't they walked away and the home went back to the original buyer, who now had two homes and two mortgages to pay.

Of course if these buyers had even done a Google search they would have seen that the guy had already done time for fraud. Just make sure you check out the builder with the BBB, state AG, etc. Like I said 99% of the time these offers are legitimate. Just make sure to protect yourself.

Good luck -- sounds like a great opportunity!

[cougarfreak]

Originally Posted by kcchief19

Inventory and cash flow primarily. Let's say they are selling Cougar cost $195,000 and they're selling it to him for a discounted price of $210,000. The builder's carrying a short-term construction loan on that house that's going to probably be a little around prime or so. They are unloading that house with a higher rate loan while picking up cash and a cheaper house that they can finance at a lower long-term rate. Now the builder can either flip it or keep it for rental property. It's not a process that every builder likes to do especially in today's market because more than likely they'll be carrying as a rental for while.

Coug, I do wish you congratulations but I also encourage you to check out the deal very thoroughly -- you might even had a lawyer look over the paperwork. I work with a lot of builders who take homes on trade and 99 percent are on the up and up. But these types of arrangements are ripe for fraud. We had a developer in our area who did some deals like this but they made the buying of the home contigent on finding a buyer by a certain date. If they didn't they walked away and the home went back to the original buyer, who now had two homes and two mortgages to pay.

Of course if these buyers had even done a Google search they would have seen that the guy had already done time for fraud. Just make sure you check out the builder with the BBB, state AG, etc. Like I said 99% of the time these offers are legitimate. Just make sure to protect yourself.

Good luck -- sounds like a great opportunity!

It's being done through my realtor, and the paperwork states that my house stays under contract with the realtor that I was working with (after the money exchange and the loan is paid off). The builder is going to do some improvements on my current home, and if it doesn't sell by 11/15, he's going to sell it to his niece.

[PilotMan]

great coug's. Thats great for you and your family. The house looks nice. I like that kitchen and the wide walkways between the rooms. I am glad that you are happy with it. Is it on a big lot? In Walton, right?

[cougarfreak]

Originally Posted by PilotMan

great coug's. Thats great for you and your family. The house looks nice. I like that kitchen and the wide walkways between the rooms. I am glad that you are happy with it. Is it on a big lot? In Walton, right?

Actually in Hunter's Ridge in Burlington. It's about 2 miles outside of the Courthouse in Burlington, straight our KY 18. I would guess the lot is about 1/3 of an acre or so. It's not but about 2 miles from where I grew up.

[DanGarion]

That's awesome! Good luck.

[flere-imsaho]

Congrats, sounds like a great deal!