estate agents offering part exchange?

puddy

We got a letter in the post today from one of the estate agents that we signed up with to look for propety. Im having problems selling my property (in a completly different part of the country to where we are moving to).

their letter spoke of a 'part exchange scheme'.

Im going to ring them tomorrow, but for the time being, does anyone know how this would work when I have a mortgage on this property? Is it only for people with no mortgage do you think?

boggie40

probably aimed at people who are desperate for money at the moment and not thinking too far into the future.
proceed with caution.....

puddy

but how would it work anyway?

Doozergirl

Essentially you buy someone's house and they buy yours.

There's nothing more complicated about it than any other house sale and purchase. It's just that the agent is trying to create a complete chain where there wouldn't be one if you were trying to move up the ladder but still waiting for a FTB to come and buy yours, for example.

You need people downsizing to form both the top and bottom of the chain.

There's not a lot to be cautious about in the way that boggie40 suggests there might be, you're not about to get ripped off by a developer - it's just EAs trying to facilitate homeowners looking to complete a sale and purchase without the need for too many people in a chain.

puddy

so if im looking to release equity from my flat, by buying somewhere cheaper than mine is (currently) being advertised for, would this work,,, i know im being dim, i cant get my head round this, it seems too good to be true

Doozergirl

You would be selling your flat and buying somewhere cheaper if the someone with that cheaper property wanted to buy your flat. You still have to pay the agent fees for selling yours and get a brand new mortgage for the smaller place, which will also cost money to upkeep. That's not exactly what I'd call releasing equity, I'd call it selling up and buying somewhere smaller :rotfl:

It's also likely that someone wanting to buy your flat miles away is not going to be living where you are now so unless people are moving into the area, that cheaper property is most likely to be in that same place miles away.

Too good to be true doesn't exactly describe it though, so I think you're missing something somewhere along the line. Part exchange works as long as you have the money to invest in a smaller property and know what you want to do with it.

dander

When you find out how it works, definitely post back - I can't figure it out either!

Would two people have to decide to just swap houses? Or has EA got some top of the run sellers willing to buy FTB properties to get a chain kicked off? Or does the EA themselves buy the part exchange properties?

Sounds intriguing!

Doozergirl

My message is too short (yawn)

dander wrote: »

Would two people have to decide to just swap houses? Essentially, yes.

Or has EA got some top of the run sellers willing to buy FTB properties to get a chain kicked off? Hopefully! That's how it works. It's what developers do - they will buy your house in turn for you spending more money on their house. The concept is being extended by EAs to regular vendors in the hope of getting some people moving. The people at the top willing to buy cheaper property to form a chain have to be flexible - eg. a developer isn't going to say they won't buy your house because of the wallpaper. If they are going to be like that, it won't work very well. I've seen some quite unrealistic expectations in the papers in my neck of the wood.

Or does the EA themselves buy the part exchange properties? Absolutely not!

Sounds intriguing!

puddy

oh, i dont think it applies to me then, im looking to buy a house on with that estate agent which doesnt have a chain (meaning they are not looking for somewhere else), i live about 70 miles from where i want to move to, meaning that its not likely people from that area would be looking to move here.
i thought the estate agent was going to buy it and then sell it themselves when things get better, meaning i would be in a position to buy the prooperty they are advertising.

baileysbattlebus

jenner wrote: »

oh, i dont think it applies to me then, im looking to buy a house on with that estate agent which doesnt have a chain (meaning they are not looking for somewhere else), i live about 70 miles from where i want to move to, meaning that its not likely people from that area would be looking to move here.
i thought the estate agent was going to buy it and then sell it themselves when things get better, meaning i would be in a position to buy the prooperty they are advertising.

Interestingly, we have done both, in the last boom, we had buyers pull out on the day of exchange and we really wanted the house we were in the process of buying, our EA offered to buy our house for the price we had sold it to the buyers who dropped out. We agreed, everything went ahead - though a little bit later than was planned. EA then sold the house for more than we sold it to them for, it sold very quickly.

Market conditions were very different and house prices were rising and houses were selling very quickly at the time. The EA was virtually guaranteed to sell straight away and for more money. Total opposite of now. Most EA's are struggling to make a living just now, let alone buy property.

In the last crash, (1993) we had a couple look at and offer on our house, but they couldn't sell theirs, they were down sizing, we wanted something bigger, we went to look at it, liked it, it was in the right place, was the size we were looking for and the price was right too.

So we decided to exchange, we got a mortgage for the new place, they got a mortgage and it all went ahead exactly like a normal sale, but with no chain. It was very straight forward. The EA's got their commision and every one was happy.

I would do it again in a hearbeat, it was hassle free. It was all in the same area though, with no chain it was fairly quick too. We're still in the house BTW.

dubsey

A lot more properties are coming on around here with 'part exchange possible' on them. But as Doozergirl has said, many with unrealistic expectations.
Someone who lives in the most sought after part of an area, would be unlikely (I would think) to want to part-ex to someone's ex-local authority in a not nice area. That's what quite a few of the part-ex's here are wanting.

We have had friends 'swap' or part-exchange their homes, when neither they nor the others could sell and it has worked out very well. But the two parties obviously need to be looking in each others areas.