House Swap/Part Exchange

gypsyemz

Hiya
My emails are broken at work and I am waiting for a response from my estate agent regarding this so I think here will be quicker response time then my email!

We have had our house up for sale since September 2008. We have had very little interest until recently.

3 weeks ago, a couple came around our home with an interest in buying it. Then we discovered that they too had a house to sell. When we looked at it, we liked it!

we had been hoping to go into renting for a while before considering buying again however due to shortage in renting houses, we have started to look more into buying again. Their house is within our budget, we are downsizing and trying to pay off debt etc in doing so. Their house is ideal for us, means we can cut down to 1 car, pay off our loan and reduce our mortgage.

They are with the same estate agent as us. They will be obviously upsizing to ours and we are downsizing to theirs.

Can anyone advise what happens in this situation as i am guessing they need the full asking price to be able to afford ours and we need the full asking price to be able to afford theirs. Does it go as a full sale each way or is there a different way its all done?

i just cant get my head around how it would work etc.

we are hoping to change mortgage providers as well at the same time, we are currently on the SVR with Alliance and Leicester which leaves us at the mercy of the interest rate! do you think we are complicating matters?

help!
thanks
Emma

Sammy85_2

As far as i know...

They buy your house using their house + difference in values.

So yours is £200k and theirs is £120k, then you get their house + £80k

gypsyemz

thank you! I have been looking at it the wrong way around! that makes sense now! ha ha!
thanks
Emma

F_T_Buyer

Sounds like a brilliant deal all round. You could also agree to pay, say 20k less, for each house (hence still equal) which reduces your stamp duty liability.

shabby_chic

Just wondered what the outcome was.

We may find ourselves in a similar situation, viewed a house and discovered the owner was someone who had viewed ours and had said he would be interested if either his or his partners properties sold when asked by agent for feedback.

Have not spoken to EA yet as this was last night but wondered whether you are going ahead.

Doozergirl

shabby_chic wrote: »

Just wondered what the outcome was.

We may find ourselves in a similar situation, viewed a house and discovered the owner was someone who had viewed ours and had said he would be interested if either his or his partners properties sold when asked by agent for feedback.

Have not spoken to EA yet as this was last night but wondered whether you are going ahead.

It's not much different to a regular sale except you are both incredibly keen to get the deal done! Start off agreeing on a price for each house. The whole process works exactly the same as buying from one person and selling from another, except your buyer and vendor are the same people.

But you work out the difference in price between the two to see if you can edge the final selling prices of the houses downwards to save on Stamp Duty. As long as the eventual selling prices are feasible as being 'market value'.

When we did it we both used the same removal firm as it was easy to co-ordinate and we got a good deal.

It was pretty smooth running for us, we saved a lot of money and we're still very friendly with the people.

shabby_chic

Thanks for the reply, glad to hear it was straightforward for you.

Do you know what happens regarding deposits as both parties have money tied up in the houses?

Sorry if the word house keeps appearing in red - due to me doing a seach for this thread:)

Doozergirl

It's just you that's red, don't worry!

You will essentially agree not to pay deposits upon exchange.

It sounds more complicated when it's a part-ex but it isn't. If you are in the cheaper house, your solicitor will pay off the old mortgage with the proceeds of the new one and pass the difference in value to the other party. That is all the money that changes hands.