Trade equity

Trade equity refers to the value derived from selling an existing property to assist with the purchase of a new one. When a buyer sells their current property, the proceeds from that sale can be used as a down payment or to reduce the purchase price of the new property. This process is particularly beneficial for those looking to upgrade to a more valuable property but needing to leverage their current asset to make the purchase feasible. For example, if someone sells their home for J$20 million and uses J$5 million of that to help buy a new property priced at J$30 million, the J$5 million acts as trade equity, facilitating the acquisition of the new home. Trade equity can be crucial in managing transitions, especially when the real estate market is challenging and selling property takes time.