Bartering is trading services or goods without exchanging money. For example, you agree with a painter that he will paint your living room in exchange for six sessions of free tutoring for his child or you make a deal with a neighbor to exchange your forty-two inch flat screen television for his pool table. Chances are you have bartered something over the course of your lifetime, but you may not have ever thought about bartering for land.
Bartering is making a huge comeback in all areas, including real estate. Bartering companies and exchanges, as well as private individuals are bartering land in many countries throughout the world. Some people are deciding to barter their land in exchange for land in another location or for goods such as a motor home, boat or diamonds and gold. One of the reasons that land bartering is growing in popularity is the economy. Some people are having difficulty selling their investment properties and are more than willing to trade it for something they want.
The Internet is a great venue for land bartering. There are websites that specialize only in real estate and others that offer a multitude of items for trade, including a section for real estate, properties and land. There are even websites that allow you to barter for the down payment on a parcel of land listed. For example, if you are interested in a parcel of land that is listed and has a value of $50,000, as a buyer you can secure a mortgage from the bank for eighty percent of the asking price, or $40,000. You still need twenty percent of the value of the land, or $10,000, as a down payment. You can barter with the land owner for the down payment and the bank will give you THE $40,000 mortgage even though the down payment was not in cash. One of the greatest advantages of bartering for the down payment on land is that the buyer does not need to have cash. In essence, the land is being purchased for no money down.
It is important to know that the IRS considers barters as taxable income.