Keller Williams

TRADE IN: Old to New

Statistics show that now not so many people buy their apartments “from scratch”: most of the current real estate buyers are those who improve their living conditions. Due to this circumstance, trade! In, that is, offsetting old housing against new ones, is becoming more and more popular. However, this technology of settlements between the buyer of real estate and its seller is as contradictory as relevant.

Trade in in its ideal form looks like this: Mr. N exchanges his old apartment for a new one, paying a certain amount to the seller of the latter. Everything seems to be going smoothly. Except for the fact that the “secondary” of Mr. N during the offset, as a rule, is estimated at 10-30% percent cheaper than the market price – to reduce risks. Formally, no robbery and swindle in relation to N in this case occurs. For example, a bank acts in exactly the same way, preparing to give a loan to a particular developer and evaluating its 300 millionth property at only 150 million dollars. What to do, risk is a noble cause, especially when it is minimized. Maybe offer your apartment to the bank – as a down payment? Today, the bank can provide you a loan for a new apartment on the security of the old, but this is the exception rather than the rule.

The easiest way to exchange a “secondary housing” for housing in a new building is to sell your old apartment, and invest the proceeds in the purchase of a new one. Realtors can build the so-called “chain” by looking for both their buyer for an old apartment and a seller for a new one.
In this case, the market
the cost of the existing apartment, the buyer is on it, and the proceeds from the sale of the apartment are transferred to the investment agreement for the construction of a new house. Legally, these actions are formalized by a construction investment agreement with a deferred payment of 2 to 3 months and an agreement order to sell the existing apartment with the transfer of funds to the account of the investment agreement.

“Maybe offer your apartment to the bank as a down payment? Today, the bank can provide you a loan for a new apartment on the security of the old, but this is the exception rather than the rule. ”

But … Selling an existing apartment while someone lives in it is quite difficult. Moreover, until recently, the institution of registration at the place of residence significantly complicated the conduct of such transactions: before selling the apartment, it was necessary to write out of it and look for a place where it would be possible to temporarily register. Accordingly, the old housing was sold after the completion of the construction of a new house, but even here the owner of the apartment was waiting for a stumbling block: moving and registering in a new apartment was possible only after the new building was taken into ownership, that is, not earlier than a few months after the commissioning of the State Commission house. Now, with the new housing legislation that has canceled registration at the place of residence, this issue can be considered resolved. One hindrance to trade-in has become less.

There is some inconvenience in the event that the period dividing the time of sale of the old apartment and moving to a new one is long – several weeks, or even months. But this problem is also completely solvable: you can live in a rented apartment for several months. This is an argument for; The argument against is as follows.
In life, things are not as smooth as on paper. “Resale” does not just change to “primary” – the cost of old housing is only one of the components, and the second component is the surcharge, that is, as a rule, a bank loan. So paying rent, paying for a loan and preparing funds for the decoration of a new home is quite expensive.
As you can see, there are so far more exceptions in the system of offsets of old housing against new ones than established rules.