Computerized system for developing multi-party property equity exchange scenarios

We claim:

1. An automated process for developing multi-party property equity exchange scenarios, comprising the steps of:

providing an electronic data base of properties available for trade;

accessing the electronic data base of properties utilizing a computer;

identifying a base property within the electronic data base of properties for which a trade is desired;

defining criteria for matching properties in the electronic data base relative to the base property;

comparing properties in the electronic data base utilizing the criteria;

automatically creating possible trade scenarios involving the base property and one or more other properties in the electronic data base utilizing the computer; and

displaying the possible trade scenarios.

2. A process as set forth in claim 1, including the step of applying additional criteria for defining possible trade scenarios relative to the base property.

3. A process as set forth in claim 2, wherein when the step of applying additional criteria takes place after the step of displaying the possible trade scenarios, and then the steps of comparing, creating and displaying are repeated.

4. A process as set forth in claim 1, including the step of restricting access to the electronic data base to validated users only.

5. A process as set forth in claim 4, wherein the restricting access step includes the step of requiring the input of an additional property to be traded into the electronic data base prior to permitting access to other properties in the electronic data base.

6. A process as set forth in claim 1, wherein the step of providing an electronic data base of properties includes the step of inputting a purported equity of each of said properties into the data base.

7. A process as set forth in claim 6, wherein the step of providing a data base of properties includes the steps of listing a value of each property and the encumbrances on each property in the data base.

8. A process as set forth in claim 6, including the step of applying additional criteria to a search of properties in the electronic data base after having reviewed all possible trade scenarios in accordance with the original criteria defined.

9. A process as set forth in claim 1, wherein the step of defining criteria includes the step of specifying a desired trade location for each property in the electronic data base.

10. A process as set forth in claim 9, wherein the step of defining criteria includes the step of defining an acceptable equity difference between properties to be matched.

11. A process as set forth in claim 1, wherein the possible trade scenarios are displayed on an electronic screen.

12. A process as set forth in claim 1, wherein the possible trade scenarios are printed.

13. A process as set forth in claim 1, wherein the possible trade scenarios are generated from and transmitted to a remote location via electronic media.

14. A process as set forth in claim 1, wherein the step of comparing the properties in the electronic data base utilizes a forward search technique.

15. A process as set forth in claim 1, wherein the step of comparing the properties in the electronic data base utilizes a backward search technique.

16. A computerized process for developing multi-party real property equity exchange scenarios, comprising the steps of:

providing an electronic data base of properties available for trade, including criteria to be satisfied in order to trade each said property;

utilizing a computer, accessing the electronic data base by inputting a base property to be traded and by defining criteria for trading said base property;

comparing the base property against other properties in the electronic data base;

automatically creating possible trade scenarios involving the base property and one or more other properties in the electronic data base utilizing the computer; and

displaying said possible trade scenarios.

17. A process as set forth in claim 16, including the steps of further defining the trade criteria for the base property after viewing a display of the possible trade scenarios.

18. A process as set forth in claim 17, including the steps of re-comparing the base property against other properties in the electronic data base, re-creating possible trade scenarios involving the base property and one or more other properties in the electronic data base, and then re-displaying said possible trade scenarios, after further defining the search criteria for the base property.

19. A process as set forth in claim 16, including the step of restricting access to the electronic data base to validated users only.

20. A process as set forth in claim 16, wherein the step of providing an electronic data base includes the steps of listing a value for each property and the encumbrances on each property in the data base for purposes of calculating a purported equity of each of said properties in the data base.

21. A process as set forth in claim 20, including the step of applying additional criteria to a search of properties in the electronic data base after having reviewed all possible trade scenarios in accordance with the original criteria defined.

22. A process as set forth in claim 18, wherein the step of providing criteria to be satisfied in order to trade each said property in the electronic data base, includes the step of specifying a desired trade location for each said property and defining an acceptable equity difference between properties to be matched.

23. A process as set forth in claim 22, wherein the step of comparing the properties in the electronic data base utilizes a forward search technique.

24. A process as set forth in claim 22, wherein the step of comparing the properties in the electronic data base utilizes a backward search technique.

25. A process as set forth in claim 16, wherein the step of accessing the electronic data base is accomplished utilizing electronic transmissions from a remote location.

26. A process as set forth in claim 18, including the step of electronically recording said possible trade scenarios.

27. A process as set forth in claim 26, including the steps of accessing the recorded possible trade scenarios and thereafter re-defining the trade criteria for the base property, re-comparing the base property against other properties in the electronic data base, re-creating possible trade scenarios involving the base property and one or more other properties in the electronic data base, and then re-displaying said possible trade scenarios.

28. An automated process for developing multi-party property equity exchanges, the steps comprising:

identifying a base property to be traded;

establishing criteria to be met for trading the base property;

accessing an electronic data base of properties available for trade, including criteria to be satisfied in order to trade each said property;

utilizing a computer to search the electronic data base to establish matches between properties within the electronic data base, and the base property and properties within the electronic data base, in accordance with the established trade criteria for each; and

analyzing the search results for possible trade scenarios involving the base property and one or more other properties in the electronic data base.

29. A process as set forth in claim 28, wherein the step of establishing criteria for trading the base property includes the steps of specifying a desired trade location and defining an acceptable equity difference between properties to be matched.

30. A process as set forth in claim 29, including the steps of listing a value for each property and the encumbrances on each property in the data base.

31. A process as set forth in claim 30, including the step of specifying a desired trade location for each property in the electronic data base.

32. A process as set forth in claim 30, including the step of defining an acceptable equity difference between properties in the data base to be matched.

33. A process as set forth in claim 28, wherein the electronic database searching step includes the steps of comparing the base property against other properties in the electronic data base, and creating possible trade scenarios involving the base property and one or more other properties in the electronic data base.

34. A process as set forth in claim 33, wherein the analyzing step includes the steps of displaying said possible trade scenarios, further defining the trade criteria for the base property after viewing a display of the possible trade scenarios, re-comparing the base property against other properties in the electronic data base, re-creating possible trade scenarios involving the base property and one or more other properties in the electronic data base, and then displaying new possible trade scenarios for re-analysis.

35. A process as set forth in claim 33, including the step of electronically recording said possible trade scenarios.

36. A process as set forth in claim 35, including the steps of accessing the recorded possible trade scenarios and thereafter re-defining the trade criteria for the base property, re-comparing the base property against other properties in the electronic data base, re- creating possible trade scenarios involving the base property and one or more other properties in the electronic data base, and then re-displaying new possible trade scenarios.

37. A process a s set forth in claim 28, wherein the step of accessing the electronic data base is accomplished utilizing electronic transmissions from a remote location.

38. An automated process for developing multi-party real property equity exchanges, the steps comprising:

identifying a base property to be traded;

establishing criteria to be met for trading the base property, including specifying a desired trade location and defining an acceptable equity difference between properties to be matched;

providing an electronic data base of properties available for trade, including criteria to be satisfied in order to trade each said property, the electronic data base including, for each property listed therein, an equity value for each property, a desired trade location for the owner, and an acceptable equity difference between properties to be matched;

accessing the electronic data base by inputting data relating to the base property;

utilizing a computer to search the electronic data base to establish matches between properties within the electronic data base, and the base property and properties within the electronic data base, in accordance with the established trade criteria for each;

creating possible trade scenarios involving the base property and one or more other properties in the electronic data base;

electronically recording said possible trade scenarios; and

analyzing the search results, including the steps of displaying said possible trade scenarios, further defining the trade criteria for the base property after viewing a display of the possible trade scenarios, re-comparing the base property against other properties in the electronic data base and re-creating possible trade scenarios involving the base property and one or more other properties in the electronic data base utilizing the computer, and then displaying new possible trade scenarios for re-analysis.

39. A process as set forth in claim 38, wherein the step of searching the electronic data base utilizes either a forward or backward search technique.

40. A process as set forth in claim 38, wherein the step of accessing the electronic data base is accomplished utilizing electronic transmissions from a location remote from the date base.

Description Submit all comments and votes

BACKGROUND OF THE INVENTION

The present invention relates generally to computerized real estate transactions. More particularly, this invention relates to a computerized searching system for locating multi-party property equity exchanges, developing potential trade scenarios, tracking the details of those scenarios, and helping to analyze the results.

Basic to an understanding of real estate transactions is that the title of real property is owned and the value of the ownership is generally the equity in the real property. If a buyer wishes to acquire ownership of real property, the following conditions must be satisfied: the buyer must be interested in the property, the buyer and seller must agree to the amount of the seller's equity in the property, and the buyer must have access to sufficient liquid capital to meet the agreed-upon sales price. The sales price typically consists of two components: (1) the outstanding encumbrances, and (2) the equity that has been accumulated. As long as the real estate market is strong, the seller is able to pay off the encumbrances and still retain some cash. Unfortunately, if the real estate market is weak, the seller may find that the market value of the property is unable to provide the desired profit from the sale. In extreme cases, the selling price of a property may not even be able to cover the encumbrances. In addition, if the buyer does not have the liquid capital to purchase the property, a transaction cannot occur. Often the buyer is the current owner of another property and the ability to buy a new property is dependent on the ability to sell the old property. Sale of the old property is a condition precedent to the purchase of the new property, due to the need for liquid capital to complete the proposed transaction. The importance of this requirement can be reduced if the reliance on liquid capital is minimized, thereby allowing more real estate transactions to occur.

Through the years, Congress has passed a series of legislative measures which have allowed the transfer of property from one owner to another to be "tax delayed" as long as the profits realized from the transfer were reinvested in a similar category of property within specified time periods. Since their implementation, these measures, as embodied in the tax codes, have encouraged creative real estate industry participants to establish trades between the owners of two properties without requiring large amounts of liquid capital to be available. The key feature in making these trades workable is that both parties must agree upon the amount of equity being traded. Occasionally one party will bring two properties into the trade to approximate the amount of equity presented by the other party. Of course, trades involving three or more parties are possible. All of these situations, however, rely on real estate agents who have access to a large number of property owners interested in potential trade situations.

Traditionally, for potential buyers and agents to become aware that a property is for sale, analysis of magazine advertisements, multiple listing publications, newspaper advertisements and word of mouth information was required. Today, however, electronic data systems have been established which help real estate agents learn of locally available properties. The agents using these systems are able to qualify the data retrieved by specifying price range, location and other physical characteristics. Such systems are usually designed to work only within their own communities and provide no automated way of exchanging data with other remote locations. Some nationwide data bases do exist, but they tend to cater to a large audience with a variety of interests and rely on the operators to properly select the desired information to be returned.

Those dealing in real property trades do so by making personal contact. This requires that the desires of two or more individual property owners and their mutual equity positions be known to an interested party, usually an agent, who becomes an information link. Such agents can make use of the existing information systems for finding or locating potential real estate transactions but, unfortunately, these systems focus on sales price and physical characteristics as the primary items for researching properties. To compensate, agents involved in real estate trades must maintain additional records about tradable properties, including where property owners might be willing to trade. Of course, two property owners interested in trading may not be interested in each others property. For example, one owner wants to use its equity to acquire another property. The second property owner, however, does not want to use its equity to acquire the first property, but is interested in a property elsewhere.

Accordingly, there has been a need for a system which increases the ability of an agent to evaluate potential trade scenarios. Preferably, such a system would be capable of developing potential trade scenarios, tracking the details of those scenarios, and helping to analyze the results. The potential trade scenarios would be developed by using a list of locations where property owners would be willing to move and comparing that list against the locations of other properties in the system. Moreover, there is a need for such a system which is useful to real estate agents in an environment in which available liquid capital for the purchase of real estate is reduced. The present invention fulfills these needs and provides other related advantages.

SUMMARY OF THE INVENTION

The present invention resides in a novel method for developing multi-party property equity exchange scenarios. In accordance with the invention, the method comprises the steps of providing an electronic data base of properties available for trade. The electronic data base is accessed, and a base property is identified for which a trade is desired. Criteria are defined for matching properties in the electronic data base, after which the properties in the data base are compared with one another and with the base property in accordance with the established criteria. A list of possible trade scenarios is created involving two or more properties in the electronic data base, including the base property, which are displayed for analysis.

A computerized searching system utilizing the present invention is useful in identifying possible multi-party trade scenarios. Property owners may advantageously utilize the computerized searching system of the present invention for improving the possibility of using the equity a property owner has in its property as a means of exchange without waiting for the property to be liquidated. Essentially, the present invention provides a vital information link necessary to arrange possible property trades based on the equity in such properties. Property trades possible utilizing the present invention include direct swaps, multi-lateral trades (i.e., circular trades), or single direction transactions.

In a preferred form of the invention, a method for developing multi-party real property equity exchange scenarios involves, first, the identifying of a base property to be traded. Part of this identification process requires that the value of the base property be ascertained, as well as any encumbrances thereon. Next, criteria must be established which must be met in order for the owner of the base property to trade it. This includes, naturally, steps specifying a desired trade location and defining an acceptable equity difference between properties to be matched. The owner of the base property must indicate acceptable locations for property to be received in exchange for the base property. Alternatively, the owner of the base property may want to indicate that payment in cash would be acceptable as well. By specifying an acceptable equity difference between properties to be matched, the owner of the base property establishes limits on the amount of cash available to supplement the equity in the base property.

An electronic data base of properties available for trade is provided. Each of the properties listed in the electronic data base includes criteria to be satisfied in order to trade each of said properties. This includes the listing of a value for and the encumbrances on each property, defining an acceptable equity difference between properties in the data base to be matched, and specifying a desired trade location for each property in the data base, as specified by the owners of such properties.

The electronic data base can be accessed by entering a base property to be traded into the data base. Thereafter, a search is conducted of information stored in the electronic data base to establish matches between properties within the electronic data base, and the base property and properties within the electronic data base, all in accordance with the established trade criteria for each. This involves a comparison of the base property against other properties in the data base, and the creation of possible trade scenarios involving the base property and one or more other properties in the electronic data base. As possible trade scenarios are found, they are electronically recorded.

The search results are then analyzed by displaying the possible trade scenarios developed. The trade criteria for the base property, as well as the other properties located in the electronic data base, may be modified after viewing a display of the possible trade scenarios for purposes of further limiting or broadening the search. This edit procedure permits the base property to be re-compared against other properties in the electronic data base which, in turn, permits new possible trade scenarios to be created and then displayed for re-analysis.

Various scenarios can be analyzed, comparing the equity of each significant property in order to understand the financial difference between the subject properties. The scenarios are analyzed to determine the likelihood of a particular possible transaction with the understanding that all of the properties have been entered into the data base as "ready-to-trade." It is possible to even substitute hypothetical "connecting properties" to assess possible trade scenarios utilizing the present invention.

The search of the electronic data base may be conducted in accordance with either a forward or a backward search technique. The search direction determines how the system looks at the data in the data base. In the forward search, the base property trade criteria is analyzed and compared against the data in the data base. Conversely, in the backward search the trade criteria of all of the other properties in the data base are compared against the base property's location.

Access may be restricted by requiring users to input an additional property to be traded, into the electronic data base prior to permitting access to other properties in the electronic data base. In this case, all of the information needed to fully evaluate the property is required, including the purported equity of the property and desired trade location of the owner. The electronic data base may be accessed utilizing electronic transmissions from a location remote from the electronic data base.

The method of the present invention and the computerized searching system disclosed permits the possible trade scenarios to be displayed on electronic screens, transmitted to remote locations via electronic media, and/or printed.

Other features and advantages of the present invention will become apparent from the following more detailed description, taken in conjunction with the accompanying drawings which illustrate, by way of example, the principles of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

The accompanying drawings illustrate the invention. In such drawings:

FIG. 1A illustrates a typical real estate sale transaction wherein two parties, represented by the letters A and B, agree to the sale of property #1 for cash;

FIG. 1B illustrates a basic, reciprocal real estate trade;

FIG. 2 illustrates an exemplary multi-party (i.e., three or more party) real estate trade;

FIG. 3 illustrates an exemplary multi-party, single direction trade similar to that illustrated in FIG. 2, with the exception that cash is introduced in order to complete the transaction;

FIG. 4 is a diagrammatic representation of the relationship between the a central (host) computer and a remote (user) computer which may be utilized in connection with the present invention;

FIG. 5 is a schematic representation of the general flow of information into an electronic data base in accordance with the present invention;

FIG. 6 is a schematic representation illustrating, generally, a method for developing multi-party real property equity exchange scenarios in accordance with the present invention, showing the general flow of information being processed from the electronic data base;

FIG. 7 is a flow chart illustrating a preferred method for developing multi-party property equity exchange scenarios, including the concepts schematically illustrated in FIGS. 5 and 6;

FIG. 8 is a flow chart illustrating the steps taken during the "input property 200" block shown in FIG. 7, wherein the steps for entering, editing and listing new property entries is diagramed;

FIG. 9 is a flow chart illustrating the steps in the "validate user 300" block shown in FIG. 7, wherein the validity of a users right to access the system is determined by the existence of properties on the system that the user represents;

FIG. 10 is a flow chart illustrating the steps comprising the "pick subject property 400" block of in FIG. 7, showing a method by which a subject or base property is determined from the list of properties represented by the user;

FIG. 11 is a flow chart illustrating the steps comprising the "find and display matching properties 500" block of FIG. 7, showing the method to select either a forward or a backward creation of real estate trade scenarios;

FIG. 12 is a flow chart illustrating the steps comprising the "find properties using backward search technique 530" block of FIG. 11, showing the steps for determining possible interested parties in a real estate trade using the backward search method;

FIG. 13 is a flow chart showing the steps comprising the "find properties using forward search technique 560" block of FIG. 11, showing the steps for determining possible interested parties in a real estate trade using the forward search method;

FIG. 14 is a flow chart of the steps comprising the "apply other criteria 600" block illustrated in FIG. 7, showing the steps for displaying selected properties based on additional criteria;

FIG. 15 is a flow chart of the steps comprising the "display list 610" block illustrated in FIG. 14, showing the steps taken to display a list of matched properties;

FIG. 16 is a flow chart of the steps comprising the "pick next property 700" block shown in FIG. 7, illustrating the main routine for interaction with the user during the property selection process;

FIG. 17 is a flow chart of the steps taken to edit a currently constructed trade scenario, which is activated during the selection of a new property during the routine shown in FIG. 16;

FIG. 18 is a flow chart of the steps comprising the "display analysis 900" block shown in FIG. 7, illustrating the method for displaying an analysis of two selected properties from a real estate trade scenario;

FIG. 19 is a sample computer screen showing information about a base property and its trade criteria;

FIG. 20 is a another sample computer screen showing information about matching properties selected in accordance with the method of the present invention, which properties match in location to the subject base property's trade criteria; and

FIG. 21 is a another sample computer screen showing an analysis of the financial information relationship between two properties matched in a proposed real estate trade scenario.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

As shown in the drawings for purposes of illustration, the present invention is concerned with a computerized searching system for developing multi-party real property equity exchange scenarios. The overall concept of the computerized searching system is shown best in FIGS. 5, 6 and 7. Broadly speaking, the computerized searching system involves identifying a base property to be traded and establishing criteria for trading the base property. An electronic data base of properties available for trade is provided, which include criteria to be satisfied in order to trade each said property. This electronic data base is accessed, typically by inputting the base property and the criteria for trading the base property, and a search is made of all properties in the electronic data base for matches between properties within the data base itself, and the base property and properties within the data base. The search creates possible trade scenarios involving the base property and one or more other properties in the electronic data base. These possible trade scenarios are displayed for analysis, and the criteria utilized during the search process can be modified to either narrow or broaden the scope of possible trade scenarios.

The process of locating possible real property equity exchanges could hasten activity in the real estate market. People could use the equity in their homes without waiting to sell their homes. Pertinent trade information is the liquefier which would replace money in the series of transactions necessary for a person to sell one property and buy another. Already in place are the homes, the rote information networks, the buyers, the sellers, the presumed equity, the representatives, and the various real estate professionals. The current liquefier to make the above groups move and interact is money. The availability of money relative to demand is the degree to which the property and its equity can be purchased from sellers by buyers using cash. The present invention will assist those desiring to sell property by reducing the role of and need for cash.

In order to provide a better understanding of basic real estate transactions, reference is made to the drawings. First, with respect to FIG. 1A, the traditional scenario of property acquisition is illustrated. In this figure, two parties are represented, A and B, in which A currently possesses capital and is interested in buying a property, and B owns property #1 and is interested in selling. With the assumption that party A is interested in property #1 and can reach an agreement on the purchase price, a transaction will occur. This transaction will result in A being the owner of property #1 and B possessing the capital provided by A.

In FIG. 1B an example of a basic trade scenario is represented. In this scenario there are two parties, A and B, who own properties #1 and #2 respectively. In order for a trade transaction to occur between these two parties, A must be interested in property #2, B must be interested in property #1, and the recognized equities in the two properties are agreed to be equal. For example, party A has a home with a market value of $100,000; existing encumbrances totaling $70,000 for a presumed equity (recognized upon the sale) of $30,000. Let us then say party B has a home with a market value of $60,000 and existing encumbrances of $30,000 for a presumed equity (again recognized upon the sale) of $30,000. A likes B's house; B likes A's house. With these conditions met, A would become the owner of property #2 and B would become the owner of property #1. Sometimes, additional capital may be required from one of the properties in order to balance the equities between the two parties. By fully implementing the system of the present invention, users will be able to find basic scenarios like this with greater ease and frequency.

Equity is the liquefier in the example of FIG. 1B. That which makes the equity positions of each party and their desires known is the passage of information. Information becomes the liquefier in the above described instance. Rather than A waiting for someone, X, to purchase its home in order to purchase B's home and perhaps waiting for X to have sold its home, etc., A, due to the passage of information, finds B. A and B found each other by making three key things known: that their houses were for sale; the values of their homes, including their equity positions; and what their desires were upon the sale of their homes. A was made aware that B was ready, willing, and able to buy A's home, and vice versa. In this very simple example virtually no cash was needed for each party to acquire a home which they would happily move into.

The computerized searching system for developing multi-party property equity exchange scenarios, improves the exchange of information so vital to arranging trades. With modern electronic communications and information processing we can help more Bs find As, and vice versa. Beyond that, the system of the present invention will help A find some other home if it does not like B's home and B still likes A's home. For example, the system will find C's home. To illustrate, the system will help B find A, A find C, and C find B. The process gives each party an improved information system. It