Many of the local real estate companies and some individuals offer the “Trade Plan”. This concept is presented as a guarantee of a simple swap of your current home to your new dream home. While it may sound enticing and convenient, I am not sure most people understand that in order to take advantage of this program they are in essence agreeing that if their home is not sold through this Broker’s efforts within a certain time period, then the Broker will purchase said home from them at around 80% of market value. This ROBS the homeowner of their hard earned equity!
Equity in your home is the difference between what your home is worth, minus the balance you owe on your mortgage(s) to pay it off. For a lot of folks, it is the fastest way to build wealth and the best way to move up to a bigger and better home in the future. This is not something you give away…
Additionally, why would a Broker work hard to sell your home if they can make more profit by taking your home in “Trade”. Think about it.
I have seen a Brokerage firm here in town close on a house with a client bought from them through their “Trade” plan and turn around and close again with a new buyer for over $20,000 more money, on the SAME HOUSE, On the SAME DAY. Now where I come from, that is not working in the best interest for your client, which is what we as Realtor’s pledge to do. If that Broker had a second buyer in their pocket, or even had written a purchase agreement with another buyer, and knew they were going to sell the first clients home for more money, they have a fiduciary duty to hand that money back to their client. I don’t care what their Trade Plan contract says…they have a MORAL OBLIGATION not to take advantage of their client, who trusted them, in this way.
This plan can enable some Buyers to buy their dream home so they will not have to make 2 mortgage payments. However, the loss of their own equity will have to be made up with funds from their savings, 401K or elsewhere, in order to have the down payment and closing costs to purchase their next home.
Some Sellers will quibble over a few percentage points charged as the Realtor commission when selling their home, yet then agree to GIVE AWAY 20% of the value of their home in the “Trade” plan. Why would anyone agree to give away 15-20% or more of your home’s value? Some Sellers don’t see the advantage of paying a commission to hire a professional, yet will agree to take a 15-20% LOSS just to get rid of their home? This makes no sense.
I believe most people duped into doing this “Trade” Plan don’t understand that if you have a house to sell in order to buy another home that the Broker is only going to give you approximately 80% of the appraised value in the “Trade” plan for your current home. They then “excuse” the high fee as they may have to hold onto it for months before it sells, utilities, paying selling commissions, etc. However, if that said Broker was doing his job at marketing your home to begin with, it should sell in the first 30 days.
“Trade” plan sales pitches are sugar coated to make the Buyer believe that they may lose their dream home if they don’t agree to the “Trade” Plan. Or that they may miss out while the interest rates are low. Don’t be fooled!
Here at Marksberry Real Estate, we will NEVER OFFER THE TRADE PLAN. Because it is not in the best interest for YOU, OUR CLIENT.
At Marksberry Real Estate, LLC we have a better way to get you into your Dream Home. We use innovative programs, like our CERTIFIED.HassleFree listing program and High Definition Narrated Video, coupled with Agent experience and a drive to serve our clients best interests.
You won’t need to do a Trade Plan when you entrust Marksberry Real estate, LLC to market and sell your home. And any extra money, you can bet it will be YOURS!