1. Your replacement property will cost you LESS if you sell and buy or exchange NOW. If you wait for your property to go up in value, your replacement property will also go up in value, forcing you to pay MORE. Not selling or exchanging will not make your property worth more.

  2. Interest rates are at or near all time low.

  3. Income tax on the property you sell or exchange will likely be less due to lower values. If you have a loss, ask a tax professional about amending tax returns for a cash tax refund.

  4. County property tax on the property you buy or exchange for may be less.

  5. Closing costs (e.g. commission) are less because they are based on price.

  6. More sellers will exchange for your Chico Area property due to this economy and the 21 reasons an exchange can be the best solution. Do not expect to find exchange opportunities unless you EFFECTIVELY market to equity buyers. No one does that better than us. We can quickly send emails and postcards to: a) Virtually all Chico Area property owners who failed to sell (REO's and short-sellers excluded). Over 750 (60%) of our latest 1,250 Chico Area sellers who failed to sell will exchange; b) 250+ Chico Area property owners who said they will exchange; c) 650+ who want to exchange property outside the Chico Area (e.g. Lake Almanor, Tahoe, Roseville, Sacramento, Bay Area, Idaho, Oregon, Washington, etc.) for Chico Area property. We also can search real estate marketing websites for additional property in your target location outside the Chico Area the owners of which will exchange for your Chico Area property. One website has 6,000+ properties; and d). Hundreds of additional cash and equity buyers quickly produced via our classified marketing strategies.

  7. Your equity buyers will likely only have your property to exchange into due to very few Chico Realtors trying to exchange. You'll have many properties to exchange into if you use both traditional marketing and our exclusive marketing system while realistically priced and your property is reasonably marketable. We offer 2 solutions if you do not like your buyer's property.

  8. You'll probably have no equity buyers competing with you for the property you hope to exchange for because very few Chico sellers and Realtors try to exchange.

  9. Time Value of Money. The cash and or cash-flow property you receive at close of your exchange escrow results in you receiving cash sooner. A dollar received today has greater value than a dollar to be received in the future for these reasons:
    • Return on your investment–A dollar in hand today can be invested today to earn you a return on your investment (rental income, interest income, etc.), resulting in a sum greater than one dollar in the future (e.g. compounding). The dollar to be received in the future cannot earn you a return until you receive it. The lost opportunity to earn a return on the future dollar is your opportunity cost.

    • Higher purchasing power–Due to inflation, a dollar in hand today will buy more goods/services than a dollar to be received in the future.

    • No risk–When the dollar is in hand there is no risk of not receiving it. Forecasting and being promised money in the future doesn't guarantee you'll receive it.

Not exchanging for better cash flow property will likely result in an opportunity cost. Exchanging for property that reduces your negative cash flow will probably benefit you.

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David M. Hector
Real Estate Brokerage
DRE # 00796981
Office: (530) 893-5533
Fax: (530) 893-5575

Toll Free: (800) 898-5568
Email: dh@davidhector.com

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