Part Exchange(7 Posts)
Looking for a bit of advice
Looking at buying a new build home and thinking of part exchange with the builder on our existing home
People have told us we won't get market value for our home and to sell on our own
Any body had experience with this before ?
You won't get market value as people have said. Get independent agents out to value it to compare with builder's valuation and see if it's worth it.
We did this six years ago. We were given slightly below market value but not drastically below. I think if we'd put it up for sale ourselves we'd have had to take quite a reduction as the roof needed replacing, just a quick valuation was done on the property on behalf of the house builders rather than a more in depth survey so it didn't flag up as a problem.
It was worth it for being such a stress free and quick process. We appointed a solicitor to act for us on Jan 4th and completed and moved in on Jan 28th. The mortgage was applied for and an offer given/accepted in that time too. Very much a whirlwind of a move but definitely preferable to trying to sell, waiting for offers and then being in a chain for months on end.
It's just like part exchanging a car. Yes you get less, but you save a load of hassle, and save EA fees, be sure to take those into account when weighing up the figures.
It depends on the market in your local area as well, and how keen the developer is to sell - I know of someone who did a part ex with a large builder desperate to shift units, got the price he originally paid for his current house a couple of years ago (value would have fallen since then), plus stamp duty paid, floor coverings and white goods, and a hefty discount (15%) on the new build.
We got about 10grand more than if we had tried to sell at that time (was wildly over valued) plus the market in our area was full of similar properties sitting for months not being sold. Guaranteed buyer, got free appliances and flooring and saved a whole load of fees.
We had a positive experience with a part-exchange recently with a major house builder, if it's any help.
We'd been trying to sell DP's old flat for 18 months on the open market but with no luck - we'd had offers but on both occasions, the potential buyers later turned out to be unproceedable (due to misrepresenting their own situations and issues with their own properties). All very disheartening & upsetting.
We then found a new build estate that we loved and got all excited when they mentioned that they could do a part-exchange on the plot that we liked. There were various criteria (e.g. existing property could be worth a maximum of 1/3 of the new property purchase price & if leasehold, had to have at least 99 years remaining) but thankfully the flat qualified. The builder reserved the plot whilst the valuation of the flat took place.
The valuation took just over a week and essentially they asked two local agents for 'quick fire sale values' - this means how much they would have to advertised the property for in order to achieve a sale within 6 weeks.
Helpfully, the two agents that they used were fairly generous in their valuations and the offer that the builder came back with was equivalent to the offers we had accepted previously via the open market. However, there were of course no Estate Agent fees to pay so we were actually better off financially, not to mention better off in terms of peace of mind!
One downside that we found is that the builder's solicitors were shit hot - far better than ours. Everything and anything was queried, particularly as the flat was leasehold. Thankfully as we were directors of the flat management company, we were in a great position to answer all queries and to know that everything was above board. There were still several really silly points raised about irrelevant stuff and we had to buy bespoke indemnity policies to appease the builders; had our solicitor been competent, this may not have been necessary. We did feel that we had a weaker bargaining position due to the part-ex element.
As the onward sale of the flat completed within 6 weeks of our completion date, we actually got a 'commission payment' of £500 a few weeks after we moved in. This was v helpful and went towards our fitted wardrobes
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