Purchasing property using Ormita has a large number of benefits. Following is an example of a typical property transaction
• A property might be selling for $100,000 in the cash economy
• The seller has to pay 3% cash commission for the sale to their real-estate agent
• An average property may sit in the cash market for 6-12 months before being sold.
• If the owner is already living elsewhere then the house is often empty and costing them for council levies, maintenance and other charges.
• The buyer has to come up with 10% of the value of the property to get a bank-loan for the balance
Selling on the cash market:
• The property is for sale for $100,000 cash
• The real-estate agent receives $3,000 cash when the property is sold
• Advertising the property for sale has cost the seller $3,000 cash
• The council levies (rates) and maintenance has cost $3000 between when the property has gone on the market and when the property sells
• The interest on the mortgage on the property is $3000 before the property is sold
The cost to sell the property is $12,000
The income from the sale of the property is $88,000 (less costs)
Selling for part barter/part cash:
• The property is for sale for $70,000 cash and $30,000 barter
• The property sells quickly because:
• Barter exchange members can use their own surplus time/goods to generate barter dollars
• Barter exchange members may have excess/unspent barter dollars
• Barter exchange members can pay $30,000 barter and get a loan from the bank for the rest of the amount (Their 70% cash needed “Loan to Value Ratio” will be very favourable to the bank)
• The barter exchange would normally charge a cash fee on the $100,000 – which might be 7% of the transaction value to the seller ($7000)
The seller ends up with $63,000 cash and plus part barter T$30,000
The barter sale occurred much faster than a cash sale would have
No real estate agents or expensive advertising was required
The new owner might rent out the property to pay off the mortgage and benefit from capital gain as the property increases in value over time.
Ormita wins again!
Important Note: Unless you are a licensed real estate agent, Ormita and its Licensees are not Real Estate Agents and can not provide Real Estate Agency services. Ormita and its Licensees provide a method to record a transaction. Please check your legal responsibilities and limitations - there may be laws in governance to this issue.
Copying and distributing this article
Ormita provides free updates about the generic benefits of barter to those interested in local currency, community currency, countertrade, reciprocal trade, barter exchange, time dollars, hours and other forms of community trade vehicles.
You may freely copy and distribute this article provided that you attribute the author and/ or source as the Ormita Commerce Network.
About Ormita
The Ormita Commerce Network spans 5 continents, with direct representation in more than 17 countries plus additional partnerships in a further 59 countries. The business allows companies to exchange goods and services on a reciprocal trade arrangement.
Some of our Websites
Ormita Commerce Network Australia – www.ormita.com.au
Ormita Commerce Network Canada – www.ormita.ca
Ormita Commerce Network India – www.ormita.co.in
Ormita Commerce Network Mexico – www.ormita.com.mx
Ormita Commerce Network New Zealand – www.ormita.co.nz
Ormita Commerce Network United Kingdom – www.ormita.co.uk
Ormita Commerce Network United States of America (USA) – www.ormita.com
For Licensee, Franchise and Partnership Enquiries please visit : www.ormitacorporate.com
