Builders selling a part exchange house.

lauren1983

Hi i wonder if anyone can give me any advice.

I have been looking at a house that has been reduced 20k in total. to £125,995

The estate agent told me it was a builder who was selling it and he aquired it as a part exchange. So i was just wondering if anyone knows what sorts of prices builders give with part exchanges. Has anyone done a part exchange recently?
He must be getting abit nervy as hes dropped it again this week and is redecorating it all (lining paper and magnolia everywhere lol)

Obviously im trying to get the best possible price at the minute but also im not planning to move again so hopefully prices dropping wont effect me that much.

Thanks

Incisor

The price he gave for it on part exchange is nearly irrelevant. Someone will have paid a difference in values between the new build and the one you are looking at, but the builder will have wanted to keep the price on the house he sold as high as possible, so that the land reg data looks good. But the buyer will have wanted to keep the price as low as possible in order to reduce stamp duty. The builder may be making a very small profit on the house he sold, but covering this up as a loss on the one you are looking at. If you had the figures, they would be no use to you.

lauren1983

Ahh right!

I was thinking if i knew the figures then i could make a more informed choice on what to offer! Never that simple is it.

Thanks Incisor

m00m00

Hi lauren1983, are you using property bee under that name

as I notice a user (lauren1983) looking at an area I've been looking at for a long time, and if so I can probably give you a lot more info than is available than just via property bee

lauren1983

Hi m00m00

Yep thats me too.
Are you looking for somewhere too?

m00m00

not actively at the moment, but I've been analysing most of nottingham, particularly ng15 since apr 07, so I know the market incredibly well. If you want to drop me a pm about any specific properties/areas I can almost certainly give you back ground info, on the past 16 months or so.

nic_santorini

just to let you know, my neighbours house is on the market for £195,000 - overpriced - would say it was worth £180,000 in all honesty - a part ex building company valued it at £140,000 for a part ex - they were going to take £20,000 off the price of the new build - which quite frankly was 100k over priced anyway - so the builders were looking for a good £40k profit in the part ex house - but it is a buyers market and the building companies are getting desperate to get their capital investments back. Hope this helps

bubblesmoney

there is a difference between people buying houses as part of the income generation and others like us buying houses to live in it. in a falling market buyers who buy to live in have the upper hand. builders will need a steady stream of sales to generate profits. if they dont generate those cash flows, then they will have difficulty with their outgoings and they wont be able to keep up on their loan payment. yes most builders will be using credit facilities for the business. in the present tight credit situation, they will be facing a double whammy when their loans are due to renewal etc. they will need much higher outgoings. they will face a situation of defaulting on payments, if that happens all their credit facilities seizes up as no one will lend them more (unless they are stupid or they are well connected enough and big enough to get a govt bail out. so they will face a situation of forced sales or they themselves will have to make distress sales to minimise their losses.

for people with decent deposits and ability to get a mortgage in the present situation there will be good bargains so long as they bargain hard to factor in any losses expected in near future in property market and dont plan on selling anytime soon.

epz_2

lauren1983 wrote: »

I have been looking at a house that has been reduced 20k in total. to £125,995

if that isnt an asking price that says make me an offer i dont know what is, who on earth is going to pay £1599 stamp duty for a property 0.79% more valuable than all the others on the market.

if you are serious about buying screw them to the wall on price, cash flow is king at the moment and this place is costing them £600 a month lost interest before capital depreciation

mewbie_2

It's an interesting thought, that if you buy into the drop and negotiate a 'good deal' you will be OK when the prices keep falling. Maybe. But I would think as we are the early stages of what is tipped to be the deepest crash since the 70's and possibly earlier, that it might be better to negotiate a couple of years on from now. In fact there may be no need to negotiate, just wander down the auction house with your credit card.

lauren1983

Yeh i understand what you are saying. and it sounds realy tempting to wait.
But we have been living at the inlaws for a year and a half now and i dont know whether its worth waiting for anohter year or two.We are desperate for our own space ect.
I know lots of people are saying the drops will be big and we are mad to consider buying now. But we could wait anohter year and prices could start creeping up again.

I wish someone had a magic ball!! Like alot of people at the minute i guess :mad:

Someone give me the will to stay with the inlaws for another year :eek:

They are lovely realy