How home owners can exchange it for real estate in a new complex
At the beginning of autumn of this year, the demand for apartment trade-ins in the new buildings market was four times higher than in the last five years. The program has regained popularity, and today it is offered by the vast majority of developers. Trade-ins already account for more than 20% of all transactions, and for some developers even 30%. Experts from the Elite.ru portal tell you what a trade-in is and how to profitably purchase an apartment using this scheme. The article uses data from the NDV Supermarket Real Estate agency.
Settlement transaction
Trade-in is an alternative exchange of old housing for an apartment in a new building. Two sales and purchase agreements are concluded between the owner and the developer. According to the first, the owner of the previous apartment allows the developer or his representative to sell the property. Under the second agreement, using the money received (plus additional payment, if necessary), the developer provides the owner with an apartment in a new building.
What are the advantages
First of all, a trade-in eliminates unnecessary headaches when independently selling an old apartment and buying a new one: the same spam calls, the need to communicate with possible buyers, contractors, housing showings, and later – finalizing transactions. All this will be taken care of by the employees of the developer or real estate agency. You can also avoid all sorts of risks associated with security and legal purity. All documents are examined by the legal service for possible restrictions and difficulties, for example, with heirs. The risk of running into fraudulent buyers is minimal.
Another advantage is that you can book the apartment you like and fix its price, which eliminates the risk that suitable housing with the most successful layouts will be sold out, or it will become more expensive, in particular, due to an increase in the construction readiness of the property. However, there is no point in delaying the collection and preparation of documents. After all, on average, lot reservations and prices last one to two months.
In addition, there is the opportunity to get a discount on a new apartment and other advantages through affiliate programs. Thus, some developers provide an additional discount or special mortgage conditions.
What schemes exist
Developers offer three options for transactions of this format. Let's start with the ransom. In this case, the developer or partner company buys the owner's apartment. The proceeds are then used to purchase new housing. This is the easiest and fastest way, but this scheme also has a significant disadvantage. The apartment is bought from the owner at a price below the market price by an average of 20%.
The next option is an honest trade-in. In this case, the owner transfers his home to the developer, who registers the apartment in the new building in the name of the client. While the old apartment is being sold, you can continue to live in it. This trade-in format is the most convenient, but there are very few developers offering this option.
When choosing the third scheme, the developer with his sales department or in partnership with a third-party real estate agency takes the client’s old apartment for sale, sells it, and uses the money received to arrange a new home. This option is the most profitable for the client from a financial point of view. However, you will need to find temporary housing for the period of sale of your previous apartment.
In any case, in the trade-in program, the owner of a secondary property who wants to purchase housing in a new building finds himself in an advantageous position. Therefore, the number of offset transactions is actively growing. However, it is worth considering that not every apartment can be sold under this scheme. Developers are not always ready to work with apartments in old buildings, municipal housing located in remote locations, etc.
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