I just ran across an article that says that some builders are now taking a buyers old home in trade for their new home. Interesting concept. Basically the builder evaluates the home for it's current market price, what it would be worth if fixed up and makes a fair market offer for the buyers home. The plus for the buyers is that they don't have to market their old home and can close quickly. The Builder get's rid of excess inventory and can usually fix up and market the old home for less then someone else.
The new home needs to be at least 20% higher in value then the new home and it appears that the buyers can't be working with a Realtor yet to market their old home. I could be wrong on this though.
Evidently this has been done very effectively in England and is starting to be used more here in the states. The link to the article can be found at Trade in that Old House at CNN Money.
Has anyone ran into this? If so, what was your experience? From a lenders perspective, I don't foresee any problems.
Larry Morris is a Certified Mortgage Planning Specialist with American Nationwide Mortgage Company in Newberg, Oregon. He specializes in USDA Guaranteed Rural Home Loans, FHA Purchase and Refinance, FHA 203k Rehab loans, Sect 184 Native American loans, Hobby Farm loans and conforming purchase and refinances in the states of Oregon and Washington.
He can be reached at 503-421-0096, or larry@PDX-Mortgage.com.
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