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Frustrated homeowners unable to sell their properties are fuelling a new phenomenon - house trading.
Real estate agents told the Herald on Sunday they had noted an increasing number of swaps and a website launched today will specialise in it.
The site is among innovative methods being used to keep the market moving as fewer houses sell - and for less - in the recession.
Buyers can also take advantage of generous vendor finance and deals to waive part of the price if a property dives in value over a certain period.
First National agent Roger Simpson-Marvin and Hamilton-based Ray White agent Bobbie Jarvis were among those to report an increase in house trading.
"If people really want [to sell] they have to be realistic about things," said Jarvis. "Times are tough."
Several properties were listed as possible trades on Trade Me this week, but the online auction site may face stiff competition from www.realtrades.co.nz being launched today by Century 21 agents Suzy Sheppard and Doug Coward.
The duo, who are based in Auckland's Albany, already have about 50 properties listed.
After successfully trading 20 properties through Century 21, they decided to make the option more widely available.
"It gives buyers and sellers another option," said Sheppard.
Under the scheme people can trade properties according to registered valuations and make up the difference with cash.
People only pay if their homes sell through the website and it operates on similar commission to real estate agencies, including 4 per cent share of the first $300,000 and a 2 per cent share of the balance.
Sheppard said it was all about "matching people" who want to trade up or down and in particular areas.
While "perfect" solutions were not always found, and traders had to show some flexibility, some people may be able to get a better deal for their homes because many houses were selling for less than valuation.
"People are getting hammered in prices at the moment, so they should try trading with us and get registered valuation money," said Sheppard.
Agents from several real estate firms were already on-board, and the website also plans to list other things such as businesses, boats and cars.
Century 21 franchise manager Treena Drinnan said the website was an advertising portal rather than a registered real estate company, but all properties were listed by licensed real estate firms.
Trading was usually done at "the higher-end of real estate" but it was now increasingly creeping into day-to-day sales.
"Trades and swaps are what seems to be increasing in the market place a lot more given the current climate, recession and state of the economy," she said.
With trades set for those already on the property ladder, agents and developers are also dreaming up ways to get people into their first homes.
Jarvis said 100 per cent finance was becoming harder to secure and John Bolton, from mortgage brokers Squirrel, said banks increasingly wanted guarantors on a home loan.
While banks preferred parents to grandparents as guarantors, the former usually preferred to gift or loan deposits to their children so they were not liable for defaulted mortgage payments.
Bolton said he had advised some vendors struggling to sell their homes to "discount the hell out of it" or told them to consider vendor finance, a process used in the 60s and 70s when credit was less freely available.
Vendor finance is where the seller leaves some equity in the property, which can be used as a deposit.
For example, a buyer might spend $270,000 on a $300,000 house and pay the remainder off over several years.
That equates to a 10 per cent deposit for the bank, who should then look more favourably on approving a lower mortgage - and possibly at a better rate.
The benefit for the vendor is that they sell and reduce financial commitments, and perhaps for a higher price.
Bolton said there was a risk if the buyer defaulted on payments and lost the house, so recommended only "good quality" buyers be considered for this.
"Think of vendor finance as simply another negotiating tool when looking for a house," he writes on his website, www.mysquirrel.co.nz.
"If you were a cash buyer you could haggle the price down. If you require vendor finance you won't haggle so hard."
