House Developers' Part Exchange Schemes

reheat

Anyone have any experience of part exchance schemes offered by developers? Where they they offer 100% of market value, is this genuine, or do they have their own interpretation of market value? And would I have to be trading up to a more expensive property, or is it possible I could 'trade across' to a house of similar cost?

Dave_the_Ginger_Cat

Firms are very different in this - you'll find some good stories and some bad

I'd recommend you test it and see - don't forget that you won't need to pay estate agents fees and the whole chain stress is removed which can be very helpful.

They will need to make their money somewhere - you may get better discounts from a new build house if you sell privately, but the market is sluggish in many areas

Egg_custard_2

A friend of mine did this recently and market value in his case meant market value 'if it was on the market to sell quickly' but my friend still felt it was a good deal.

As previous poster said, it removes some of the stress. It can also be a good way of getting things moving quickly. My friend's house had stagnated on the market for months and they were desperate for more space so, for them, it was worth losing potentially a few thousand just to secure the sale and enable them to move.

I think even if you get a good price for your previous house, you lose out because you have little room for negotiation on the asking price of the new house with part-exchange deals.

Contessa

I've looked into this with two new housing developments. My intention is to move closer to family but unfortunately, in a more expensive part of the country.
So-called "part-exchange" schemes may be simply where the developer pays the buyer's estate agent's fees, or a full "we buy yours, you buy ours" scheme. It was this that I enquired about.
One developer was not interested as my home is too far away. The other one (which is a much better location ) was willing. EA fees would be paid. The house to be sold needed to be valued at no more than 70% of the new house.
Apparently they ask a local EA for price to sell in 4-6 weeks, and 2-4 weeks.
They offered me less than this.
Plenty more houses out there for me.
Get yourself a very long barge-pole!

reheat

Many thanks for your replies. I'm trying to balance possibly losing money via this route, compared to trying to sell with a next door neighbour who is a total PITA and whose garden is like a bomb site.

mark5

We done the Barratts part ex scheme in 2006, they did more or less give us market value for our old property but we paid £216,000 for a house that was realistically worth around £200,000 at the time.

I cant remember the percentages but you needed to be trading up by a certain amount for them to offer part exchange.

I would do part-exchange again for the hassle free move it was but its not the moneysaving way, you would probably be better off pricing your old property at a very competitive price and then negotiating on the new build.

oasisfeverish

We are currently doing this and should complete sometime in Jan.

To bounce some figures about for you.

Developer's PX scheme is that you purchase a property at least 30% more in value than yours is valued at. Although ours worked out slightly less than 25%.

Purchasing £229,950

Originally offered £165k, we counter with a 'need' £177k, they responded with a £174k, we agreed based on getting a few 'extras' thrown in.

They placed our property on the market for £170k, which was very competitive as similar on sale prices in area started from £175+.

We had 2 viewings, and 1 no show. 1 viewing placed offer and was accepted at £165k. So Developers should clear around £160k once EA fees, survey, admin taken into consideration. £14k less than offered.

Although effectively £14k less than they have agreed to, they are making their profit on the new build, I also believe the properties value are based around £210-215k so have overpaid as you do, but we (In our opinion) have the best plot, SW facing garden, thermal heating roof tube panel and at of the end of the road so no through traffic, field on one side with grade II listed building so very unlikely to ever develop on (been turned down by LA 3 times as access would be straight onto a country lane with no street lighting).

Downside with us was there was no chance of neg on the purchase price, however did on their offer price. And at the time only 5 x 4 bed houses on whole development left, knew we couldn't hang about. Which is true as they were all snapped up pretty quick after release.

Plus for us is although a buyer was found for ours, would I have accepted £165k, probably not so might have been still trying to sell it now and the house we wanted sold. Or would have needed to really make them budge on the purchase price by a similar margin from the £177k I originally wanted, making the price down to £218k from £229950.

But like what mark5 has said it is a hassle free way of moving, and we do see ourself staying for at least 10 years plus.

reheat

oasisfeverish wrote: »

We are currently doing this and should complete sometime in Jan.

To bounce some figures about for you.

Developer's PX scheme is that you purchase a property at least 30% more in value than yours is valued at. Although ours worked out slightly less than 25%.

Purchasing £229,950

Originally offered £165k, we counter with a 'need' £177k, they responded with a £174k, we agreed based on getting a few 'extras' thrown in.

They placed our property on the market for £170k, which was very competitive as similar on sale prices in area started from £175+.

We had 2 viewings, and 1 no show. 1 viewing placed offer and was accepted at £165k. So Developers should clear around £160k once EA fees, survey, admin taken into consideration. £14k less than offered.

Although effectively £14k less than they have agreed to, they are making their profit on the new build, I also believe the properties value are based around £210-215k so have overpaid as you do, but we (In our opinion) have the best plot, SW facing garden, thermal heating roof tube panel and at of the end of the road so no through traffic, field on one side with grade II listed building so very unlikely to ever develop on (been turned down by LA 3 times as access would be straight onto a country lane with no street lighting).

Downside with us was there was no chance of neg on the purchase price, however did on their offer price. And at the time only 5 x 4 bed houses on whole development left, knew we couldn't hang about. Which is true as they were all snapped up pretty quick after release.

Plus for us is although a buyer was found for ours, would I have accepted £165k, probably not so might have been still trying to sell it now and the house we wanted sold. Or would have needed to really make them budge on the purchase price by a similar margin from the £177k I originally wanted, making the price down to £218k from £229950.

But like what mark5 has said it is a hassle free way of moving, and we do see ourself staying for at least 10 years plus.

Our current property should sell for similar to your sale, but we are not in a position to move up. Although only a quite small mortgage left, not that many years left till retirement, and don't want a mortgage to extend after that. And negligible spare cash per month.

Looks like we shall have to sell our house the normal way and hope for the best I think.