Definition of "Trade-in House"

John Marascia real estate agent
John Marascia, Real Estate Agent Only Way Realty Citrus

The definition of trade-in in real estate refers to a swap of houses. The trade-in program gives a seller of a property the chance to find an ideal replacement home for their family while still living in their initial home. A trade-in program eliminates the pressure of time in selling and finding a new home to live in, the need to stay at a hotel, or rent until you can move into your new home. The seller also doesn’t have to coordinate the sell of their house to attune with the purchase of the new home.

The term “trade-in” might be more common for trade-in cars. The process is similar to trade-in houses between home-owners, home builders and homeowners, real estate agencies/agents, and homeowners. Another term used in real estate for trade-in homes is house swapping.

How does Trade-in work?

House trading or trade-in houses is how an owner can swap houses with another entity (homeowner, home builder, or real estate agency). The most common type of real estate trade-in happens between two homeowners. When you want to do a house trade-in, you first find a homeowner interested in trading homes with you. It might be a matter of location for both owners or a trade-up (seeking a bigger house having outgrown it ) or trade down (seeking a smaller home to cut down expenses) that brings the two owners together. 


Once the owner finds the trade-in house, they can start negotiating. Now, this is where the swap mentioned above happens, but it is still a transaction. The homeowners get loans approved if needed for the new house and close home mortgages if they are still in effect. 


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When the financial stage is over, and the purchases are made, the owners move into the other’s house, more often than not, at the same time.

Home trade-in program

As mentioned earlier, there are home trade-in programs that are promoted by real estate agencies or agents. The market strategy claims that this program provides an easier way to sell an old home and purchase a new one than the traditional real estate transactions. In the next segment, we’ll try to show how exactly they work.

If you decide to go through an agency’s trade-in program, it might help to know what to expect and precisely what they are selling. These are the steps they follow for their trade-in program.

  1. After you show your interest in their program, the agency will send a representative to assess your property value;
  2. They will get back to you with an offer, a fair market value for your property;
  3. The agency buys your house as it is, no need for repairs, staging, presentation and all of that;
  4. If you accept the offer, you can also purchase the new home through the real estate agency. This can grant you some benefits;
  5. Once the offer is accepted, you can start looking for your replacement home. You can take your time, and the agency won’t rush the process for you;
  6. When you find your new home (the replacement home), bothsales will be finalized at the same time, both for the sale and the new purchase.


You’re probably wondering how real estate agencies do this trade-in program? Well … they have investors, and these investors are the actual buyers of the home you’re selling. They buy the property, invest in it, then sell it again. This program works as an intermediary between two homeowners while involving other stakeholders in the process. However, the whole program is still, essentially, a swap of two houses.

Comments for Trade-in House

Jamie Snow Jamie Snow said:

Does this work on new homes

Aug 13, 2021  15:20:28

Real Estate Agent

Hey Jamie! Thank you for reaching out to us. As it is mentioned in the explanation of the term Trade-in, seeing as a home trading can occur between a homeowner and other entities like home builders, real estate agencies, and other homeowners, yes. A trade-in or a home trade can work on new homes.

Aug 17, 2021  11:09:06

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