We own a house worth approx. $700,000. If we transfer this to our son who owns a home worth approx. $400,000. He sells his home and gives us this money, what are the tax implications to this?

There will be a transfer/revenue tax paid on the amount he pays you, family or not. You can't just sell him a 700K house for 400K without risking some IRS scrutiny about a gift tax (paid by you) on the 300K. The maximum gift currently is 13K per parent per year. Then there's what you do with the 400K he gives you - You will be buying a smaller place, or living with him? It's best to pay for a real estate lawyer even for a family transaction like this. If you live with him there, consider making him a 4/7 owner while you stay on the deed. If there are other children, you should pay for a formal appraisal so there is no dissension.