Part Exchange

The_Analyst

Looking to move house in the next few months and found a new build that we are interested in.
The developer (Taylor Wimpey) is offering part exchange on certain properties so looking into that as a possibility. Has anyone had experiences (good or bad) with part exchange? Any stories to tell, or advice to give?

I've already had the house valued independently so I know the ballpark I'm looking for, whilst I also appreciate they will no doubt offer less than market value (in the same way that a car dealer does this when you part ex a car)

Any hints, tips, warning, stories or experiences that the wise folk on here can share would be massively appreciated

Thanks

sal_III

Other than the usually massive under-pricing that you seem to be aware off, check if your Mortgage lender is happy with part-ex. Also if you currently have HTB equity loan it won't work.

The_Analyst

Why would my mortgage lender be bothered about part ex? Surely the funds would be released in the normal way?

We aren't on HTB so no issues there

The_Analyst

Update to this. Agreed a Part Ex fig with the developer on Friday. Around 10k under the market value, but with stamp duty (5k) paid on my behalf and no estate agent fees (2k) it was a good enough deal.
Paid the reservation fee on Sunday, house will be finished in Dec

Jane_B

They usually give you a value based on it selling within 1 - 4 weeks, which might be a lot less than market value in the current housing climate.

For us in our area properties take 6+ months to sell, so the taylor wimpey part ex offers were silly, as they would have to be to sell in 1-4 weeks.

The_Analyst

Little update to this:
We agreed a Part ex figure with Taylor Wimpey that was 10k under market value, but they agreed to pay my stamp duty (£5k) and together with the money I'm saving on agent's fees (about £1.5k) I'm happy enough with the deal.
The developer put our house on the market for market value but quickly reduced it by 20k for a quck sale. They then accepted an offer 7k less than that so have taken a massive hit, but one I'm sure they'll more than make back when they receive the funds for the house I'm buying.

So in the main, we have a new house and move on 1st Feb
TW are happy as they've sold our house and have another new house sold
Purchasers of our house (a nice young couple) are happy because they are getting a nice big house for 2k less than I paid for it 11 years ago


Win win all round :-)

Thrugelmir

The_Analyst wrote: »

The developer put our house on the market for market value but quickly reduced it by 20k for a quck sale. They then accepted an offer 7k less than that so have taken a massive hit, but one I'm sure they'll more than make back when they receive the funds for the house I'm buying.

Shows how much profit margin they have to work with in the new property.

airandwater

The_Analyst wrote: »

Little update to this:
We agreed a Part ex figure with Taylor Wimpey that was 10k under market value, but they agreed to pay my stamp duty (£5k) and together with the money I'm saving on agent's fees (about £1.5k) I'm happy enough with the deal.
The developer put our house on the market for market value but quickly reduced it by 20k for a quck sale. They then accepted an offer 7k less than that so have taken a massive hit, but one I'm sure they'll more than make back when they receive the funds for the house I'm buying.

So in the main, we have a new house and move on 1st Feb
TW are happy as they've sold our house and have another new house sold
Purchasers of our house (a nice young couple) are happy because they are getting a nice big house for 2k less than I paid for it 11 years ago


Win win all round :-)

Fantastic. Sounds like you got a good deal without the hassle of listing a property and crossing your fingers that a chain won't collapse.

Did you get a good price for your new house compared with other similar ones sold in the development and even outside?

Thrugelmir wrote: »

Shows how much profit margin they have to work with in the new property.

For every person that gets a good deal, there are 2 or 3 others that will be screwed.

Last year I bought a new build and the price sold for 4 beds on the same street, all identical, ranged from £580,000 for a detached to 620,000 for a semi-detached and even £640,000 for a detached one. Yet the asking price for this spec was £625,000! Rear garden sizes do vary but do not correlate with price sold.
I presume developers milk "plot" snobs who are willing to pay a premium or eager to move, but discount to those who are less fussy.

Finding out what your neighbours paid in a new built development isn't easy as it sometimes takes 5-7 months for the for the property and first price sold to appear in the land registry.

tom9980

The_Analyst wrote: »

Little update to this:
We agreed a Part ex figure with Taylor Wimpey that was 10k under market value, but they agreed to pay my stamp duty (£5k) and together with the money I'm saving on agent's fees (about £1.5k) I'm happy enough with the deal.
The developer put our house on the market for market value but quickly reduced it by 20k for a quck sale. They then accepted an offer 7k less than that so have taken a massive hit, but one I'm sure they'll more than make back when they receive the funds for the house I'm buying.

So in the main, we have a new house and move on 1st Feb
TW are happy as they've sold our house and have another new house sold
Purchasers of our house (a nice young couple) are happy because they are getting a nice big house for 2k less than I paid for it 11 years ago


Win win all round :-)

A nice paper exercise for them saying you bought it for £xxxk so other buyers are lured into purchasing above what in reality they made from selling your property, fact is they got £27k less than what the land registry will say.

The_Analyst

airandwater wrote: »

Did you get a good price for your new house compared with other similar ones sold in the development and even outside?

We paid the list price for the property as it was clear there was no wriggle room (part ex seems to take away a lot of the flexibility) but they are already selling the same style house for 5k more on the same development so am happy we got a good deal.

Roof went on the house last week, so feels like we are getting there.....:j