When builders buy property in part exchange do they pay less?

Better_Days

I am considering putting an offer in on a property up for £235k. It is currently empty and I know that a local builder purchased it to secure a sale on a new build in a nearby village.

So my question is when builders do this do they usually pay less than the market value when such arrangements are made? Am kicking myself as I viewed the property just before the previous owner moved into her new house and I should have just asked then!

The property has been on the market since the beginning of November 2011, and is rather tired inside.

DannyboyMidlands

If they paid less than market value, why wouldn't the vendor just sell it on the open market?

I suspect that they flatter the vendor with the price they pay but make it back by inflating the price of the new build.

Better_Days

Thanks for your thoughts Danny

I think that the vendor did try and sell on open market, but was unable to do so, so builder purchased the property to secure his sale.

The property that she purchased was £250k, I know this because a different agent tried to flog me the property before it was built. Unlikely to be more due to SD. Vendor an elderly lady on her own who just wanted to move to a village location with more amenities, having met her I think it is unlikely that she did any hard bargaining, but you never know.

Was just interested in what builders do in these circs

terrierlady

developers/builders DONT BUY HOUSES they sell them so will try to do a back to back sale on the property they will offer about 90% of market value or less if using Forced sale value to purchase.The ease of Part Exchange makes people do it but you still have a for sale notice outside your home and still have to have viewings whilst you live there however if a sale happens whilst you are in occupation you get 0.5% on sale price,some companies others offer more. You will live in your propertry until the new one is ready.

Better_Days

Thanks terrierlady

The elderly lady has now moved into her new house, and builder has purchased the old, to enable her to move. It sounds that, as I suspected, the builder won't have paid MV.