How does a part exchange work?

rocketdog_2

Just wondering really, how these work with big building companies?

How much under the top price are you offered for your house (roughly)?

If the vendor won't lower their house price, can you ask for more for yours (even if you are refused) or do they give you one price only?

I know the vendor has 2 valuations done, will your private valuations stand for anything?

How long are you given to decide if you will take their offer?

What are the pro's and con's?

Thank you.

Grogged

Here's how it worked for us with DWH.

They valued our house with 2 local EA's and offered us 90% of the mid price.

They identified a couple of issues that we remedied.

They paid for all the legal work, 5% deposit on new build, flooring in new build and their removal service.

This part is obviously dependent on the deal you have negotiates on your new house.

4 weeks later we moved.

It was a good deal for us, but as ever DYOR.

turtletowers

This is our deal with Morris Homes.

They got 2 local estate agents around and they asked them to price it for a quick sale.

They then offered us a price. We told them we needed at least £5k more or we wouldn't have enough equity. They ummed and ahhed and pretend they needed MD authorisation, but they did it!

We also got £22k off the price of the new house and flooring included.

This was all based on the assumption we completed by within a month so they got the sale within their finanacial year end.

We had to pay for our own solicitors and they have now marketed the house for another £5k above what they gave us for it.

Like Grogged it was a good deal for us, as we wanted the convenience of not having to find a buyer or pay estate agency fees, but it depends how flexible you can be on price.

Also, because we only came in at the 11th hour, the kitchen and bathrooms had already been chosen, so although the house being ready worked in our favour in someways, it also worked against us in others.

Orpheo

They backhand the EAs to downvalue your house.

They offer you 80-90% of what you'd get if you priced it realistically and sold it yourself.

They um and ah over the price that you are buying for and make it sound as if you are sending them to the poorhouse.

They "reluctantly" agree to a reduced price that they have already priced-in.

They sweeten the deal by throwing in carpets. Literally.

The part-ex house is "sold" to a subsidiary so that it is off the new-build company's balance sheet.

Whether or not the subsidiary sells the house, the new-build company is laughing all the way to the bank and their customers get on the internet to tell everyone what a good deal they've got, with carpets thrown in. Literally.

House prices remain artificially inflated.

Disclaimer: This post was manufactured on a line containing cynicism.

turtletowers

You say that Orpheo, but my house has been on the market at this 'reduced price' and no takers yet!

If you want to move to a new build and you need to sell your house in order to do so, then it is a good option. Houses aren't selling at the moment due to a lack of first time buyers with deposits.

The house I am buying is far superior to anything similarly priced in the area so I am happy with the deal.

I know all about their tactics , like when we were haggling - they tried to say they had another couple interested! But we stuck to our guns and were prepared to walk away unless we got the deal we wanted.

Orpheo

turtletowers wrote: »

You say that Orpheo, but my house has been on the market at this 'reduced price' and no takers yet!

If you want to move to a new build and you need to sell your house in order to do so, then it is a good option. Houses aren't selling at the moment due to a lack of first time buyers with deposits.

The house I am buying is far superior to anything similarly priced in the area so I am happy with the deal.

I know all about their tactics , like when we were haggling - they tried to say they had another couple interested! But we stuck to our guns and were prepared to walk away unless we got the deal we wanted.

If you are happy with the outcome, then that's all that matters.

I have to take issue with the bit that I have put in bold. I have a deposit in excess of £50K, I'm not buying because house prices are falling. I have offered on two houses though, one offer was declined as the vendors were "insulted", the house is still for sale, now for £5K less than we offered. The other offer was accepted, turned out to be a part-ex house for sale by a new-build company, my survey identified big issues, the company was greasy in their dealings with me, so I pulled out.

shortchanged_2

turtletowers wrote: »

This is our deal with Morris Homes.

They got 2 local estate agents around and they asked them to price it for a quick sale.

They then offered us a price. We told them we needed at least £5k more or we wouldn't have enough equity. They ummed and ahhed and pretend they needed MD authorisation, but they did it!

We also got £22k off the price of the new house and flooring included.

This was all based on the assumption we completed by within a month so they got the sale within their finanacial year end.

We had to pay for our own solicitors and they have now marketed the house for another £5k above what they gave us for it.

Like Grogged it was a good deal for us, as we wanted the convenience of not having to find a buyer or pay estate agency fees, but it depends how flexible you can be on price.

Also, because we only came in at the 11th hour, the kitchen and bathrooms had already been chosen, so although the house being ready worked in our favour in someways, it also worked against us in others.

Sounds very similar to double glazing sales patter.

Mazzawa

Just going to jump on this thread instead of starting another. How does a part exchange work on a private property then i.e. not new build? Seems to be a lot of them going around up here, not being sold by those nasty express agencies. Do you literally do a swap or is there stuff going on behind the scenes?

turtletowers

Orpheo wrote: »

. I have a deposit in excess of £50K, I'm not buying because house prices are falling.

Orpheo You are in a great position, but you must agree you are in the minority.

The usual trend of young people buying starter homes are not doing so because in the past they only needed a couple of grand to get their 5% deposit together and now they need upwards of £10-15k.

My house that I was selling was a terraced and there aren't a lot of FTB's around here with wads of cash

I know that house prices have fallen, and being selfish I hope they dont go down any further, but I wasn't prepared to wait to get my next home sorted.

Good luck with your search, with that kind of deposit you could get a cracking deal on a new build

grimsalve

Orpheo wrote: »

They backhand the EAs to downvalue your house.

...but there's nothing to stop you approaching other local EAs and asking for a quick sale evaluation if you think your house is being undervalued.

Orpheo wrote: »

They offer you 80-90% of what you'd get if you priced it realistically and sold it yourself.

Agreed... assuming you could find a buyer who'd offer you full asking price (what if all potential buyers offer you 10-20% below?), and you've got to factor in other charges too.

Orpheo wrote: »

They um and ah over the price that you are buying for and make it sound as if you are sending them to the poorhouse.

They "reluctantly" agree to a reduced price that they have already priced-in.

They sweeten the deal by throwing in carpets. Literally.

The part-ex house is "sold" to a subsidiary so that it is off the new-build company's balance sheet.

Whether or not the subsidiary sells the house, the new-build company is laughing all the way to the bank and their customers get on the internet to tell everyone what a good deal they've got, with carpets thrown in. Literally.

Most builders aren't charities though - the decision on my part-ex only took a couple of days once they got the valuations back from the EAs. For me, the difference between part-ex'ing or selling via an EA was probably only a couple of grand and the part-ex was hassle free.