by Dieter W. Heinichen In this article we are going to explain what the real estate swap is, an operation that often gives rise to unique properties that are often complex to convert into liquidity.
Contents
History of the real estate swap
We are going to do a little history of the economy until we get to the real estate exchange.
It is always said that the greatest invention of humanity, the one that represented the most important technological leap, was the invention of the wheel. However, some civilizations that did not use the wheel like the pre-Columbian peoples, became great empires and it was not due to the invention of the wheel but to another invention of greater repercussion for humanity: the invention of markets. In fact, inventing a market, that is to say, everyone agreeing to meet at a time and a place to exchange goods and services, was the basis of trade and the development of all humanity.
At a time when the economy was based on barter, in the markets there was the circumstance that a farmer wanted to sell a cow and another, who wanted to buy it, in turn wanted to sell a ton of potatoes. If the first wanted to buy a ton of potatoes, they shook hands and the exchange took place. Note that the price cow/ton of potatoes was at 1.
Soon the first difficulties appeared to know "the price" of the different goods and services among them. Because either the peasant who wanted to sell the cow was not interested in the potatoes or the other did not have as many potatoes as the one with the cow, he believed that they were necessary for the exchange. These difficulties led to the emergence of money as a universal tool for the exchange of assets that could not otherwise be exchanged.
Basic Swap Examples
Suppose that someone who has a cow and wants to sell it meets someone who wants to buy it, but who has potatoes, and the one with the cow is not interested in potatoes. The easiest way to agree is to exchange the cow for money and the potatoes (in another transaction) also for money.
As the markets evolved, new problems appeared: the fluctuation of prices and liquidity: The price of cows and potatoes fluctuate continuously, and not only that, but also the price of the different currencies involved in transactions, and the interest rate of these different currencies also varies. In addition, all the markets in the world are interrelated, for example the sale price of the cow in Singapore affects the price and the interest rate of the Canadian dollar, as incredible as it may seem. Lastly, there are liquidity problems in the markets. Perhaps you can always buy a kilo of potatoes, but you can't always sell a medieval castle, no matter how much we lower its price.
the real estate market
Sometimes in order to continue advancing we must go back: In the real estate sector we often see an example of these situations: certain products have sufficient liquidity and if they are put up for sale in a few days they will be sold, for example a 100 square meter apartment in In Eixample Barcelona, on the other hand, there are products that have been on sale for months (or years) and that due to their particular characteristics do not find a buyer, that is, they cannot be exchanged for money, instead it could be that they reach a transaction through barter.
For example, the owner of a rural farm who wants to sell it and the owner of a flat in a city also wants to sell it, but they haven't found a buyer for months. Instead, perhaps the owner of the apartment in the city would be interested in exchanging it for the rural estate.
Both real estate products, due to their characteristics, do not find a buyer who contributes the money that the sellers need, but perhaps they would reach a real estate swap agreement if they knew of the existence of the other product that can be swapped.
Real estate swap with Property National
Now we return to the beginning when we defined the invention of markets as a fundamental step for progress. Property National in the framework of Oscar Hub has created the market for real estate swap because it has a stock exchange or database of special assets.
The only requirement to access the database and the possibility of swapping is to have included your own unique real estate assets in the real estate swap database (or real estate swaps) from Property National.
If you would like more information about Property Swaps you can contact Property National.
