New Home Builders offering trade in programs for old homes -How does it work?

Question

I recently saw a flyer from a builder in northern virginia who was willing to sell your old home if you opted to purchase a new home. How does this work? Is there any catch to this?

Answer 1

The builder generally takes possession of your existing home and lists it with a real estate firm for sale. While it is an easy way to dispose of your existing home, the trade value is normally not what you might get on the open market selling it directly.

Generally, the builder will allow himself some slack in the price so that he won't lose money when he finally sells your first home.