The concept of trading homes works as follows: I'll buy your house, but only if you buy mine. The exchange takes place on the same date via a simultaneous closing.
Who Can Swap Properties?
Anyone. Trading homes is just another way of selling real estate.
The concept is especially beneficial to someone who is moving to a different location and simply wants a similar place to live in.
What Are The Benefits?
For starters by swapping the property instead of selling it the traditional way, sellers have a higher chance of receiving close to the appraised value.
In declining markets like the one we're in, sellers are often forced into accepting offers far below the current appraised value. But by trading instead of selling, sellers are not forced into liquidating to investors.
What Happens To The Existing Mortgage?
Most existing mortgages will be paid off at closing. A possible exception would be an assumable mortgage that can be transferred into the new owner's name, but these scenarios are rare.
Trading homes is becoming a real alternative for many families. Of course with all financial transactions it's important to ask lots of questions before you sign on the dotted line. But if you take the necessary precautions up front, trading could be the way to go.
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