The main question is whether it’s worth it or not!! Whether you are a real estate agent or an owner. I will give some explanations of what I think!!
What is a property exchange?
A property exchange is nothing more than the possibility of negotiating properties without necessarily involving money. Generally, it involves the trade of properties between parties, whether land, houses, apartments, commercial spaces, or even properties under construction.
There are 2 main ways to carry out an exchange: swapping one or more properties of equivalent value or paying the difference if one is more expensive.
Another common situation that can bring a great future advantage is transferring land to a developer and receiving one or more apartments built on the site, depending on the property value and completed developments.
Advantages of property exchanges
Many people opt for this type of transaction because it does not require other forms of payment, but beyond that, there are other benefits to exchanging properties. We listed the main advantages:
It’s a great opportunity for those who want to get rid of a property but are not finding a buyer willing to pay the asking price;
No income tax is required if the values of the properties are equivalent and no money is involved. If one property is more valuable, only the excess amount will be taxed by the Federal Revenue Service;
Exchanges are much less bureaucratic than sales, since only one contract and registration are required;
Owners will not need to resort to loans or financing to acquire a new property. Thus, they won’t be tied to any long-term debt.
Disadvantages of property exchanges
However, despite many advantages, there are also some negative points that can become a barrier for owners. Check them out:
It is necessary to be very attentive to the real values of the properties so that none of the parties end up at a loss;
The property or location may have hidden problems. Perhaps the neighborhood, the location, or the property itself is not ideal. After all, if someone wants to get rid of it, there is a reason, and sometimes it may not be obvious;
It can be a bit more difficult to reach a final agreement since it involves properties of people with different views and perspectives.
How is the commission for brokers handled in property exchanges?
For those interested in leaving a location or getting rid of a property, an exchange is a great opportunity. But for real estate brokers, is it worthwhile?
This question may arise for some professionals, as if there is no sale, no money is involved. However, that is not exactly how it works. The professional who facilitates the brokerage is very important during this type of negotiation and certainly receives payment for their services.
According to the Fee Reference Table from the Regional Council of Real Estate Brokers of São Paulo (Creci-SP), in exchanges, fees are owed by the respective owners who hired the broker’s services. After all, there is no exact “seller” and “buyer.”
It is recommended that the commission value be calculated based on the sale value of each property, even if they were exchanged. In São Paulo, commissions by table range from 6% to 8% for urban or industrial properties and from 8% to 10% for rural properties. However, this is not mandatory and if all parties involved reach a good agreement, there is no problem.