Real estate guide: Trading houses

by Lori Madden 07/02/2023

House trading is a type of real estate transaction both buyers and sellers find simpler and more convenient than traditional buying and selling. While the exchange isn't quite as simple as swapping keys and moving in right away, there can be advantages for those wishing to make a quicker change.

However, a home trade-in program isn't right for everyone. Real estate agents can assist with the process, but it can still be complicated if the timing doesn't work out perfectly.

So, how can you know if trading is the right option?

Definition of a "trade-in house"

The terms "trade-in" refer to the swapping of real estate property. The trade-in program allows sellers to find the best replacement home for the home they want and stay in their first property.

Trade-in programs eliminate the pressure of locating and selling a property to live in, staying in a hotel or renting a house to move. In addition, the purchaser does not have an obligation to coordinate the sale or buy of a new house.

How it works

Simply put, swapping properties is like buying or selling your home to someone. However, rather than having only one transaction, you have two transactions – one selling the home and one buying. Each house is assigned to a separate buyer and seller.

Advantages

It's simple to sell to make money through trading versus purchasing. Both the purchaser and seller can avoid real estate commissions when they are not represented by a real estate agent.

When you trade houses, you can avoid the hassle of paying for storage of furniture and other items while you wait for a sale to go through. It also makes it easier to get financing: as long as you have a contract in place to sell your home, your current mortgage payments won't count against your income.

Downsides

The main disadvantage of trading houses is you're likely to have fewer options to choose from compared to a traditional home search. While size and features might be the same, you may not end up in the exact location you prefer.

Another possible downside is if timing doesn't work out perfectly, you could potentially have to pay two mortgages at once during the overlap.

There are many scenarios where trading homes can be a quick and painless transaction. However, it's important to consider the downsides as well as the advantages. Consulting a real estate agent about your options is the best way to begin if you're not sure which way to go.

About the Author

Lori Madden

As a Florida native growing up in Sarasota, I have seen my hometown grow from a sleepy coastal town to a highly sought-after destination along the shores of the Gulf of Mexico. After working in Chicago for 5 years, I returned to Sarasota and saw it through a new lens and really began to appreciate what makes Sarasota so desirable, including temperatures that allow for year round outdoor activities including tennis (a personal favorite), golf, boating, kayaking, fishing, paddle boarding, or just relaxing and/or shelling on our pristine sandy shores, including Dr. Beach’s #1 beach in the United States for 2017, Siesta Key! Sarasota’s cultural amenities are many and diverse, appealing to a wide range of arts lovers. Downtown Sarasota has become a destination in itself, drawing many new developments for those who want to be within walking distance of Main Street's offerings and the picturesque bayfront and marina. Foodies will find an eclectic mix of locally owned and operated restaurants offering something for everyone, and there are now Farmers Markets every day of the week in various locations throughout Sarasota, but the Saturday morning Farmers Market in downtown Sarasota draws the biggest crowds. Since 1988, my passion has been selling real estate, representing both buyers and sellers. I have been recognized by my clients and customers for an uncompromising work ethic and dedication to helping them achieve their real estate goals. Relying on my experience as a real estate paralegal and being highly organized, I am able to help make the transition between contract and closing a smooth one for my clients. With an eye for interior and landscape design, I've been known to pitch in and help Sellers minimize and/or reorganize their belongings in order to stage their home to maximize its sale potential. I specialize in out of state buyers looking for their piece of paradise along the Gulf Coast and make it a priority to keep them up to date on our quickly changing local real estate market. I welcome the opportunity to share with you all Sarasota and her surrounding islands have to offer!