Part ex- will we get market value?

[DrSeuss]

Never considered part ex before but we need a bigger place and there's a new development near by that has houses that suit our needs. Has anyone done this? If so, is it a good idea or do they rip you off?
Thanks

Depends on the developer, but you are likely to find that they get three local agents to value the house, and give an estimate of what the house would actually sell for, ie not the asking price. They will then make you an offer based on those valuations, bearing in mind that they want the house to sell, not sit on the market for months on end.

It will probably be lower than you would hope for, but if you look at what houses round your way are selling for, rather than what they are listed at, you may be less disappointed.

We PX'd to move into our current house.

Our old house was on the market, and I think they offered us most of that amount. Negotiating anything off the new house price is usually pretty hard so we plumped for haggling for a higher spec fixtures and fixtures!

Your old house's worth normally can't be more than 75% of the new house price though - I think that's pretty standard.

We've been looking into this recently. Their current tactic seems to be that they have a certain amount of money allocated (around £10k-£15k for the houses we're looking at) to try and sweeten each sale. The money comes from having their own house prices inflated.

If you part exchange, they'll offer you what sounds like a reasonable price for your house, but trying to get anything else out of them is a bit like blood out of a stone. This is because they assume they'll lose money selling your house on and that's where your allocated sweetener money goes.

If you come in as a cash buyer or sale already arranged, the company we're looking at immediately offer money to use as a deposit for their house, pay stamp duty, throw in extras, etc. Anything except reduce the house price, to keep them artificially high!

Advantages of part exchange are that you definitely have a buyer that shouldn't mess you around, you might not have to pay agency fees, and you have the security of staying in your own home until your new house is ready.

But, in our case around here, you'd be basically paying thousands of pounds for the privilege of that, even over the money saved with agency fees, etc. Cheaper areas the figure is probably less, expensive areas I expect it's more.

One other thing you need to do is to check with mortgage providers... They're pretty savvy about the tactics the new build companies are using. So, for a new build, they assume the house prices are inflated, so want a higher deposit amount and will lend less than they would on a second hand house.