One of the largest hurdles families face in the search for a new home is what to do about the home they are currently living in.  We hope this three part series helps illustrate how trading a home can benefit a family.

The first of this series discussed the most common hurdles families face when seeking to move to a new home.  This second part discusses how a new home builder offering a Trade In Your Home program can help overcome these challenges.  The third part will discuss how a trade program works.

What Is Trading

Trading your home is when you trade (sell) your current home to a builder and then buy one of their new homes.  This is similar to trading in an automobile, however it is done on two separate contracts instead of one document.

Both transactions will close at the same time at the same title company.  Your equity in your old home can be used towards your down payment on your new home.

How Much Is My House Worth

The value of your current home will be determined the same way a real estate agent would determine what price to list your home for sale.

A builder will typically order a Comparative Market Analysis, inspect your home and order a real estate inspection.  This will give him or her the information they require to determine a value for your house.

 Once the builder is able to determine what improvements are required (paint, carpet, roof, etc..) if any and the price the home will sell a trade value will be determined for the home.

Our company offers a “net price” meaning that we deduct out real estate commissions, repairs, marketing fees and negotiation factors.  Here is a case study on a recent trade offer.

Here is what this family would most likely net out if they listed with a real estate company;

 Realtor Lists & Sells Home

 List price                                                                                 $260,000

 Negotiations (3%) & Commission (6%)                                 ($22,932)

 Home Warranty & Title Policy                                               ($2,597)

 Carpet, Paint & Repairs                                                          ($13,000)

 Landscaping upkeep and grooming                                        ($1,500)

 Total Adjustments off of list prices                                        $40,029

 Projected Homeowner Net Proceeds                                      $219,971

Here is what a family would most likely net if they traded in their home;

Builder Offered Trade Value

Retail value of home                                                                           $260,000

Less Carpet & Paint (major items)                                                     ($11,000)

 Less Seller Adjustments – 10%                                                         ($26,000)

Total Adjustments off of list prices                                                    $37,000

Net Value For Trade Credit                                                                $223,000

In this example the home owners are most likely going to receive a bit more net value for their home than trying to sell it themselves. Please keep in mind that every trade is different and individual circumstances will vary.

Repairs

All homes require repairs and updating to be ready for sale.  When a builder takes a home in trade he has developed a plan to address those items and will be able have his crews handle the repairs once you have moved out of the home. 

By conducting the repairs with his crews and in a vacant home, he is often able to save on costs versus what they would cost you to have the same work done.  Builders are also less inclined to be worried about small cosmetic items which may make a typical home buyer nervous.

 Benefits

The builder will often take your home in its current condition without requiring you to replace the carpet, do paint touch up or fix sheetrock damage. 

You can avoid the trouble of negotiating a sale or dealing with odd buyer requests. You will not have to be ready to jump at a moment’s notice when a Realtor wants to show your home of have any pressure to keep the home in show ready condition all the time.

However, the biggest benefit is that you are able to move when you are ready into a home you want in a timely manner with minimal disruption to your life.

 What Can You Trade

The best trades are when the property you are trading in is worth less than one half the price of the property you are seeking to purchase.

Most commonly a family will trade in their existing home.  However, sometimes a family will offer a vacant lot or an investment property.

Thank You

During down markets, trading is a great means of moving without taking the risks associated with attempting to sell your existing home.  In a hot market, trading may offer a great means of being able to move on the house you want before someone else beats you to it. 

Either way, if you are considering a move, look at all your options including trading.  The last part of this series will detail the steps of how a trade will work.  To see the entire series visit our blog.

If you have a question on how to a trade program works, please feel free to email your questions to our offices.  Garabedian Properties is a full service building firm serving the Dallas/Fort Worth Metroplex.  We offer new luxury homes, premium remodels, green building/remodeling, home care services, storm/roof repairs and commercial building contracting.

Please feel free to leave your comments, drop us an email at mike@garabedianproperties.com or call our office at 817-748-2669. I also encourage you to visit http://www.garabedianproperties.com to see movies on our homes, hundreds of pictures and information on how we can be of service to your family or clients.  Or become a fan on Facebook.

If your family is not quite ready for us at this time, we will be at your service when you are in need or wish to request our assistance.  If you know a family or client who may be in need of our services, we welcome and honor your referrals.

One of the largest hurdles families face in the search for a new home is what to do about the home they are currently living in.  We hope this three part series helps illustrate how trading a home can benefit a family.

The first of this series discusses the most common hurdles families face when seeking to move to a new home.  The second part will discuss how a new home builder offering a Trade In Your Home program can help overcome these challenges.  The third part will discuss how a trade program works.

Hurdles To Moving (Part One)

 Two Mortgages

Some families will move into a new home then sell their old home.  This option does allow for a family to move at their own pace without being rushed however they do have the financial burden of two homes.

These costs can include mortgage payments, taxes, insurance, utilities and upkeep.  In addition to the costs you must also work to clean up the old house and take care of all those unfinished projects that must be completed before putting the home on the market.  Once all of that is completed, the selling ritual of pictures, Realtors, showings, negotiations, offers and counter offers begins.

While all of this is in progress, your family is still placing demands on you to help get settled into your new home.  Then all those other pesky little aspects of life keep eating up your time, work, school, children’s events, etc…

Our family has tried this before and although it is convenient, I can attest that once you are about 99% moved out of the old house, the last 1% can be a drag.  The work and time it takes to get the old house ready to sell WHILE you are trying to get your new home ready to live in can be stressful and it does take some of the joy/excitement from the move into a new home.

Two Moves

Other families resign themselves to selling their home first then moving into temporary housing (apartments, rent house, in-laws) and placing their belongings in storage until they can find a new home. 

This method allows for a family to take their time in the search for a new home, however, the costs associated with a double move and storage of one’s personal items can add up.  Often the temporary housing is smaller and less comfortable than living in true home. 

We are also hearing from families that their children do become restless as they are not settled into a permanent environment.  Once the families become restless the pressure to “just buy something” becomes intense and families may settle on a home or location that is not their first choice.  Our family has done this option and it is only by God’s grace my wife did not kill me.

Sell & Search

The most common approach which we have witnessed is a family selling their home and then making a mad dash to find what they a new home once their home sells. 

Often in the rush they have to settle for what homes are available in their budget.  More often than not we find these families settling for a home and then spending tens of thousands of dollars to try to fix the home to get close to what they were hoping to find.

This rushed approach to finding a new home is always tempered by the stress and pressures of making sure the contract on their existing home settles up.  We have heard stories of buyers who use the family’s contract on their new home as a tool to get greater concessions out of the family on the contract on their existing home.

 Common Factor

The common factor in all of these scenarios is that the family is at the mercy of outside forces and either has to spend time and money to cover additional costs, put themselves under undo pressures, settle for a house that may not have been their first choice or all of the above.

The next part of this series will discuss how a builder offering a Trade In Your Home program can offer an easier less stressful path to your family’s new home.

Thank You

If you have a question on how to a trade program works, please feel free to email your questions to our offices.  Garabedian Properties is a full service building firm serving the Dallas/Fort Worth Metroplex.  We offer new luxury homes, premium remodels, green building/remodeling, home care services, storm/roof repairs and commercial building contracting.

Please feel free to leave your comments, drop us an email at mike@garabedianproperties.com or call our office at 817-748-2669. I also encourage you to visit http://www.garabedianproperties.com to see movies on our homes, hundreds of pictures and information on how we can be of service to your family or clients.  Or become a fan on Facebook.

If your family is not quite ready for us at this time, we will be at your service when you are in need or wish to request our assistance.  If you know a family or client who may be in need of our services, we welcome and honor your referrals.