Apartment exchange according to the “trade-in” scheme: pros and cons

Recommendation points

• Peculiarities of apartment exchange “trade-in”
• Advantages of exchanging an apartment under the trade-in scheme
• Cons of the “trade-in” exchange

The scheme for concluding transactions, called “trade-in” (trade-in), can no longer be called new for the Russian market, but it has not yet become widespread in the real estate trade. It is possible to describe the principle of this scheme in action simply – “the old one surrenders at the expense of buying a new thing”.

For the real estate market, transactions under the “trade-in” scheme are rare, in Moscow and St. Petersburg today only a few real estate agencies operate on the principle “your apartment in exchange for a new building.” Such an exchange scheme has become much more popular in the automotive market – many car dealerships offer a very popular service – “you give us an old car, we will give you a new one, with a surcharge, of course.”.

This form of exchange, of course, shortens the terms of the transaction and allows the buyer to quickly get a new thing, without wasting time looking for buyers that still do not need old property. But if with the car market everything is more or less clear and simple enough, the “trade-in” scheme in the Russian real estate market has received a number of features and is not always the best option for the buyer..

In this article we will try to consider all the features of the exchange of apartments on the principle of “trade-in”, its advantages and disadvantages.

Peculiarities of apartment exchange “trade-in”

It is clear that an apartment is a much more expensive and necessary thing than a car. Even an ordinary “odnushka” in an old building in Moscow can cost several million rubles, so both buyers and sellers approach real estate transactions with particular caution and attention..

In the case of a trade-in transaction, the realtor instantly buys out the owner’s old apartment, providing housing in the new building in return, that is, by offsetting. This is the main difference between this type of transaction and the alternative sale and purchase with the redemption of old residential space, when a real estate agency simply puts the proposed lot for free sale through its channels, waiting for a buyer to be found..

The shortest possible time frame can be called the main feature of the trade-in transaction – by giving away the old apartment to pay part of the cost of the new one, buyers can immediately move to a new place of residence, the transaction usually takes literally two to three days, which go to check the title documents and execution of contracts.

As a specialist in such exchange schemes, lawyer Oleg Sukhov, notes, the “trade-in” scheme is used both in the primary and secondary real estate markets. As an example, we will give an apartment exchange scheme, for example, near the Skhodnenskaya metro station, which has two living rooms for a more spacious three-room apartment in Khimki. The market price of a two-room apartment in this area is about 6 million rubles, since the real estate agency buys housing at a discount – on average 25%, its cost will be set at 4.5 million rubles. It is this amount that will be used to offset the acquisition of new living space. The average price of a three-ruble note in Khimki is 6.7 million rubles, so the new owners will have to pay an additional 2.2 million rubles.

For apartments that take part in trade-in transactions, specialized real estate agencies put forward a number of requirements:

• living space should be located exclusively on the territory of the capital. Apartments in the Moscow region or, for example, in the Leningrad region, currently do not take part in such transactions. This is due to the relatively low demand for such transactions in other cities, and with a large difference in the cost of housing – the amount of additional payment for an apartment in a Moscow new building, received in exchange for housing somewhere in Elektrostal or Dolgoprudny, will be too large. At the same time, in exchange for an apartment with a “Moscow residence permit”, developers and realtors can offer not only housing in one of the many new buildings in the capital, but a country cottage or townhouse in one of the villages near Moscow. It all depends on what kind of objects the developer is building and the choice available today;
• the apartment must be owned by the seller, and not leased, albeit long-term, the documents of title are checked by specialists carefully and scrupulously;
• real estate agencies take into account only apartments, a room in a family dormitory, a communal apartment or the share of one person in the total living space in transactions under the “trade-in” scheme cannot participate;
• special requirements are put forward for the “cleanliness” of the apartment, it is highly undesirable if one of the homeowners is a minor and the permission of the guardianship and trusteeship council is required to conclude a transaction. In this case, the real estate agency will most likely refuse the seller..

Advantages of exchanging an apartment under the trade-in scheme

The main advantage of exchanging old housing for a new one according to this scheme is urgency and efficiency. This is the fastest way to move to your favorite, much more comfortable apartment or country cottage, without waiting for the sale of the old residential space, obtaining a mortgage loan, and so on..

In addition, in the case of a trade-in transaction, the real estate agency takes care of all the worries and troubles associated with the paperwork and legal support for the exchange of living space. The seller of an apartment will not have to spend money on advertising, publishing ads, collecting documents, spending money on an expert assessment, and so on..

Cons of the “trade-in” exchange

Despite the indisputable advantages, the “credit” housing exchange scheme also has a number of disadvantages, which led to its low popularity in the real estate market. The main disadvantages of such an exchange include:

• lack of a lot of choice. As a rule, a certain real estate agency or a particular developer offers only apartments in their own residential complex for the conclusion of transactions under the trade-in scheme, therefore, the opportunity to choose the area of ​​residence or the location of the building is not always provided;
• the price of an old apartment participating in the trade-in exchange will in any case be lower than in the case of its sale on the free market. All developers and development agencies purchase apartments at a discount, which can reach 20-25% of the market price, which, taking into account the capital prices, is fraught with a loss of 1-1.5 million rubles from the cost of housing. The funds are not paid to the seller, but are immediately credited to the developer’s account as the main payment for the new living space;
• It is not always that homeowners who have taken part in a transaction according to a “credit” scheme are given the opportunity to immediately move to a new, comfortable apartment. Often, developers offer living space in houses that are still under construction, so you have to wait for the completion of work and putting the house into operation. In addition, the new apartment may need renovation, which will also postpone the moment of a happy housewarming for a long time. All this period – before moving to a new apartment and completing repair and finishing work in it, you will either have to huddle with relatives or rent a house, since the old apartment has already become the property of a real estate agency or developer, and often has already managed to find new owners. Such additional costs and inconveniences deprive the trade-in transaction of its main advantage – the speed of moving to new housing;
• the likelihood of encountering unscrupulous agencies offering a scheme that Oleg Samoilov, general director of Relight Real Estate, calls “false trade-in”. In this case, the developer books a new apartment only for a certain period, taking on the responsibilities for this period to sell the old housing. If it is not possible to sell the apartment before the agreed time, pressure is exerted on the seller, forcing to lower the price. Thus, the only advantage of such a scheme is the guaranteed reservation of a newly-built apartment, however, setting a deadline for the sale of a secondary apartment also nullifies this advantage, so experts do not see any point in such a service of realtors.

For the first time, trade-in transactions appeared on the Russian real estate market in 2009, when the crisis led to a significant decrease in demand for apartments and country houses on the primary market. With the help of such a “netting” exchange scheme, developers sought to attract the attention of potential buyers to new buildings and increase sales.

And yet, as practice shows, over the past three years, such a scheme has not become in demand, and if the seller intends to compensate for part of the cost of a new apartment by selling the old one, in 90% of cases, an alternative scheme of double purchase and sale is used, when secondary housing is exposed for sale by real estate agency.

Experts unanimously advise using trade-in exchange schemes only if the risk of missing out on an apartment in a new building is too great, and the residential complex itself has already been put into operation.

In all other options, it is better to think several times – is it worth losing a significant part of the cost of your own apartment and in a hurry. According to some experts, the best alternative to the trade-in scheme is a mortgage loan with the ability to repay it in the future at the expense of funds received from the sale of residential space. In this case, the seller can slowly collect documents and search for buyers, not reduce the price in order to sell the apartment urgently and at the same time, thanks to the quick repayment of the mortgage, he will not overpay too much in interest..

Of course, the mortgage lending system in our country also has a number of shortcomings and cannot be called perfect, however, the disadvantages of exchanging an apartment according to the train-in scheme are more than advantages, therefore it is unlikely to become more popular in the real estate market of our country in the near future … In addition to the conspicuous drawbacks that reduce the attractiveness of such a scheme for sellers, the developers themselves today also do not need to attract buyers using the credit scheme – the demand for Moscow new buildings is stable and will not decrease in the near future.