The traditional method of selling a home can be difficult and time consuming in these tough times, especially in the upper price ranges. Recently, almost 50% of higher-end homes being sold are now structured as trades, where the seller of the more expensive home is willing to take a lower priced property as part of the sale price plus cash to settle the difference.
More Buyers For Your Property
The seller who is willing to consider a trade in today’s market increases the number of potential buyers for their property. And, taking a less expensive property in trade can actually benefit some sellers. They end up with a less expensive property that might be easier to sell or rent, or it might just be the property they intend to use themselves.
A trade requires a seller willing to consider a trade and a buyer who is realistic about today’s values. Many buyers expect to pay wholesale and to get retail value for their trade property. A successful trade requires both parties’ willingness to trade either wholesale for wholesale or retail for retail. With the right approach a property trade can be a very effective solution for both parties.
The Concept of a Trade
A trade can be viewed as two separate transactions taking place at the same time where Party A buys a property from Party B, while Party B buys a property from Party A. The closing of each transaction is contingent upon the simultaneous closing of the other. Basically a trade is “I’ll buy your home only if you buy mine.”
The Benefits of Trading
Trading unlocks your equity and will allow you to sell and move if a traditional sale has been difficult. Taking a less expensive home in trade allows a seller to lower exposure on a home that isn’t selling. There are numerous prospective buyers in today’s market that won’t buy unless and until they sell their present home.
The simplest trade involves two homes that are both free and clear (cash sales). But, this is not always the case, if you remember that a trade is basically two sales happening at the same time with each party securing the approvals and funds needed to close their respective sale.