Buying retirement flat - house to be taken in Part Exchange

bluewater

Has anyone experience of this because I smell a rat!

An elderly relative wishes to purchase a new retirement flat (price 205k for a 1 bedroom). The sellers will take his house off his hands using a third party company (it's worth about £300k) and they have made him an offer of £290k.

I am concerned that he is being squeezed both ways here. I spoke to a local EA who said he had come across this before and that in his experience it was usual for at least three valuations (including comparables) to be obtained. As far as I know only the third party company has valued his house. The EA also said he would be willing to value the flat.

The sellers are putting a bit of pressure on which also makes me nervous.

What do you all think please.

Doozergirl

Sounds normal to me. Of course they're being squeezed at both ends, that is the nature of part exchange. A developer wants to make money on anything they can.

They can offer you whatever they want to, there are no rules that say you have to be offered x amount. You can take it or leave it.

If you want best value then you should probably sell independently and then knock down the price of the new property; but some people like the convenience.

You can always try and get a bit off the price or some carpets thrown in and whatnot. They can only say no!

cattie

Where on earth is this 1 bed retirement flat for £204k? I live on the borders of SE London & Kent & retirement flats cost a lot less. A nice 2 bedroom flat retirement flat can be bought for under £155k & a 1 bed flat can often be had for under £115k. In my area there is currently a 1 bed bungalow up at £115k & a small 2 bed flat that hasn't attracted a buyer for quite some time has been reduced to £114k on one development

Retirement flats have a limited market & as such don't comand the same prices that flats on the general market would, so I'd be very, very wary of forking out such a huge sum. Retirement flats can be months on the market before attracting a buyer, so that's something else to bear in mind.

merlinthehappypig

Having spent ages looking at this option for my in-laws I would advocate extreme caution before buying one of these retirement flats. We looked at several nearby and in each case they were at least 25% more expensive than a comparable flat not aimed at retired people. They were also a lot smaller, almost as if they think you shrink 50% after the age of 70.

I appreciate that most have some attempt at facilities for older people, but that usually just consists of an alarm which they can have free anyway and a warden who is rarely there after 5pm or at weekends (and who can't help in any caring capacity anyway).

From speaking to agents and other residents they are incredibly hard to sell. the best of the bunch near us has been on the market 18 months now. Add in the service charge of around £1500-£2000 a year and they are a costly investment.

I'm not saying don't buy one - just do your homework first.

As for part-exchange, it's an option if you have no choice, but an even better way of losing money fast.