Has anyone ever tried to, or completed on a part exchange with a new build?(22 Posts)
Was there any hidden costs? Or surprises of any kind?
Was it as straight forward as they all claim to be?
Was the offer they put to you for your old house within striking distance of market value, or was it way off?
We went through a sort of hybrid process - they guaranteed a (not great) price for our house which would kick in if we did not sell by a certain date. The difference was such that we could have lived with it, but in the end we exchanged ourselves within a week of the deadline so didn't have to invoke it.
My impression is that the main impact it has is that they are a bit less willing to do deals on purchase price for the new house, or carpets, etc.
See it seems to me (in my very little knowledge it has to be said) that on the one hand they are really pushing for what sounds like good deals because they are obviously struggling a bit to sell their new builds, but then on the other hand, the last thing they want is to be stuck with your old house on the market.
We have enough equity in this place to be able to sink a lower offer, but would also want to know we aren't then paying over the odds for the new build, espeically with things as they are.
Is the main consensus that it works or not?
It worked for us but it was 1993 so I can't remember the details.
I think they did take a while to sell our old flat so just purely from that point of view it worked well for us.
Also - DH had bought in 1987 - peak time. We were selling in '93.
Hi - I work for a PX company - they offer a much lower price than the current value, plus you have to be able to exchange contracts within 28 days with completion about 10 days later.
Or you could go on the market try and get a better offer and then reserve your plot, but it may mean you have to go for your second choice as the one you wanted may sell in the time you were on the market.
The quicker you can get through the whole process the more willing the builders are to give you incentives - which I would present them with just after exchanging contracts - then they have no way out!!
Plus, with too many new builds and no buyers, it is a good time to consider it and get lots of freebies thrown in.
hope this helps?
Thanks for advice everyone. I don't think it is something we'd look at seriously doing until after this baby is born, but I am feeling a bit more positive about it, and less 'too good to be true'.
I have rang round a few different builders just to get a general idea of what it involves, one of them have actually stopped the PX offers completely, so I guess others will probably follow suit, so in waiting we are gambling that, but can't do much about it at the moment!
Thanks Orinoco, have you had any surprises along the way?
Hy Dh is a developer on newbuilds and they use a third party to buy the part exchanges so they can usually only move so much on the price offered on your home, however they can usually make this up on the price you get for your new build home. The developer can only move so much on the price of the new build as they have to be able to repay the capital to investors who fund the build. it may mean that your newbuild cant be lowered in price any further due to the price agreed with the investors...
My Dh tells his close friends that in this market the developers are desperate to move houses, whilst you may not be able to move anymore on the part ex or house price you should be able to negotiate far more on things like landscaping, appliances and the overall finish. So you may not get 3k knocked off the house price but you could very well get 3k of carpets, curtains, appliances, tiling etc.
Do you think your DH would say it is good time to do this? And how long on average does it take to go through the whole process from start to finish?
Sorry for all the questions.
We have loads of friends who are all "waiting for the market to drop" to get on the property ladder. people in early 30's who have been having to wait to get deposit mortgage etc for years. DH tells them all the time, the developers will snap your hands off if you have a property to sell and have mortgage in place etc. he says its a fab time for a buyer to get a deal, if the market dropped too low and the developer cant cover their build costs, they wont sell the property as the investors wont let them!
So many of my Dh's customers have come back 6/7 times thinking if they wait, he will have to srop the cost of the actual house or increase the offer on their house. He cant, he has to get funding from the bank and from investors to build the house in the first place. they want their capital back so DH has a fixed price he can drop to...things in the house which cannot be moved such as lawn, paving, tiles etc are tax deductable to developers and so more room to move on these things!
the process with my Dh takes as long as buying a "second hand" house normally, around 8 weeksish. however, my Dh often has people saying they need to move within 6 weeks for example and they get pushed through as its another plot sold. You have so much negotiating power but try not to think of it solely on how much you get for your house, the developer has more sway in the house that they built!
Thanks that is really helpful.
I am really undecided as to whether to push it now and see what happens, or wait till the baby is born (due in January, our fixed rate mortgage runs out in February).
It just seems too good to be true in the current climate. And if we can see that, then why hasn't everyone else and already done it?!
becuase everyone else thinks if they wait they will get it even cheaper! wrong!
my Dh has sites where say for example they have to sell the houses for 250k min, if they cant get that figure the bank and investors can seize the site, finish the build with subcontracted builders and sell the houses at the price they want 250k. the developer would fold etc. holding out wont mean that the houses will drop, they will just be withdrawn from sale.
TheDoctorsWife46 - that is really interesting. However, just because your DH's hands are tied as regards price, doesn't mean that all developers' are.
If the buyers wait it might get much cheaper...
No thats quite right upwind, other developers may not have the funding that mine does however many developers are shutting shop whilst the market is poor rather than taking a loss. sorry if that isnt clear but just to say to the OP that there are other ways of securing a bargain.
Why would you want a new build anyway, they are smaller rooms on tiny plots of land, crammed in and usually full of teething problems.
If you must buy one get a "snagger" round to check it before you sign your life away, Barratts are absolutely awful and the NBC 10 year guarantee is not worth the paper it's printed on.
If the developers can't seller because the investors won't let them, I would tell them to stuff it and get a bargain elsewhere.
Yes, about 6 years ago. We saw a new build house that we liked. It was a 'one off' built by an independent builder not an estate house...We hadn't sold our house yet. Our existing house was worth around 40% of the purchase price of the new house. It was my idea ...the sale was never offered as a part exchange. We approached the builder with our proposal and he agreed.
Reckon we exchanged our old house for around £10-£15K less than what it might have otherwise made on open market...but you have to offsett estate agents fees, general angst and hassle of trying to arrange house buying chains etc. Well worth it imo.
Tried to p-x last month, but the offer for our house was 30% lower than what we expected (we'd already adjusted our expectation down by 10% or so due to market). We laughed at them and walked out. They then chased us and offered a reduction of over 20% on the new build, providing we didn't use the p-x scheme!
Make sense? Anyway now, we're lucky enough to be able to borrow enough money to buy the new build outright, so we've done that (moving tomorrow ) and providing we sell our old place at some point for at least what they offered, which we don't doubt we can, since we've already got interest at our expected price, we've done far far better for avoiding the p-x.
The new build company reckoned it costs them about 40k to run the p-x scheme on a house, so if you can avoid using p-x, you should be able to negotiate at least that much off the price...
Katie DD - I live in a new build and have a massive back garden.
Not as far as I know I don't have anything to put in it as yet
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