In CA, is there a legal way to trade homes or property with equal values?

Question

I don't mean a 1031 exchange. Say, my home is valued at 1 million, but I bought it at 500,000. Can I trade that home for another million dollar property and maintain my current mortgage since the value of the new property is the same?

Answer 1

Lenders generally will not allow a substitution of collateral, so you would need to contact your lender.

Answer 2

No, in almost all loans anymore, there is a Due on Sale clause. By trading homes, you are actually selling your home for the value from someone else's home.

*******More Info on the subject********

If you are trading investment properties, it is called a 1031 exchange. You will trade properties without incurring a tax liability.

If it is your private home, you can actually sell it after 2 years without incurring a tax liability if the value is less than $500,000. The changed that amount a couple of years ago, and I may be off on the exact amount that is exempt from taxes.

Now if someone has a house you want, and you have a house they want, you can actually purchase each others house for $1.

The government will declare the transaction not to be a valid sale for the assessment of property taxes though. What that means, is they won't value the property at $1, but at the previously appraised amount.

You can contact a Land Office. They can help you close the deal. Be for warned though, because there are two houses involved, your closing costs will be doubled.

Good Luck.

Answer 3

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