Buying Flat from Part Exchange- Confused!

unr

Hi all

First time buyer here. Currently made an offer for a flat, but in a bit of a confusion, thought you guys might be able to help.

A colleagues had a flat he was looking to sell, so I arranged to go for a viewing. Liked the place and arranged subsequent viewings for the place through the estate agent. Colleague has a reserved plot for a new build house with Taylor Wimpey who I've been told have a part exchange agreement for the flat.

Colleague had been pressuring me to put an offer in and book viewings, so that interest on the flat was active, before the listing went down. The listing has been put up by the builders, Taylor Wimpey.

The flat was advertised as market guide price of 185k. I emailed the estate agents with an offer for 170k, and simultaneously messaged my colleague as well saying I've put an offer for 170k and we can go from there.

He's instantly turned it down and been quite harsh about it - from his language it seems like he wouldn't even accept an offer for 184,900 let alone 170k.

I then had an email from the estate agent saying the offer has been rejected, would you like to offer 175k. I gave him a ring and the agent says that my colleague is actually going to be out of the chain, and will be moved to a rental if the paperwork is completed before build. The agent says he's not dealing with my colleague at all and that his client is the builders who are the people accepting and rejecting my offer. He suggests I shouldn't speak to my colleague directly as he's not involved.

This contradicts what my colleague is telling me directly - that he's the one accepting offers and that if he doesn't get the right offer, he will just stay where he is, he doesn't need to move out of his flat.

I'm confused as to how this part exchange works - does my colleague still own the property and ultimately will my offers make it through to him, or am I actually only concerned about and dealing with the builders who have the listing on (as the estate agent has said).

I just don't want to be negotiating with a party that doesn't ultimately have say on what the selling price is going to be. My best guess is that my colleague has agreed a part exchange at a base price and whatever they sell for above that, he gets to keep. He's hence trying to go round and directly pressure me into putting a higher offer. The property developer/part exchange company aren't fixated on 185k because the agent mentioned he sees the deal happening between 175-180k, and I'm assuming it's because as long as they can get it sold for the base price they agreed with my colleague, they would sell it.

Does anyone know what's going on and have any advice? I've currently kept it low with the colleague and just dealing with the agent instead.

[Deleted User]

unr said:

Hi all

First time buyer here. Currently made an offer for a flat, but in a bit of a confusion, thought you guys might be able to help.

A colleagues had a flat he was looking to sell, so I arranged to go for a viewing. Liked the place and arranged subsequent viewings for the place through the estate agent. Colleague has a reserved plot for a new build house with Taylor Wimpey who I've been told have a part exchange agreement for the flat.

Colleague had been pressuring me to put an offer in and book viewings, so that interest on the flat was active, before the listing went down. The listing has been put up by the builders, Taylor Wimpey.

The flat was advertised as market guide price of 185k. I emailed the estate agents with an offer for 170k, and simultaneously messaged my colleague as well saying I've put an offer for 170k and we can go from there.

He's instantly turned it down and been quite harsh about it - from his language it seems like he wouldn't even accept an offer for 184,900 let alone 170k.

I then had an email from the estate agent saying the offer has been rejected, would you like to offer 175k. I gave him a ring and the agent says that my colleague is actually going to be out of the chain, and will be moved to a rental if the paperwork is completed before build. The agent says he's not dealing with my colleague at all and that his client is the builders who are the people accepting and rejecting my offer. He suggests I shouldn't speak to my colleague directly as he's not involved.

This contradicts what my colleague is telling me directly - that he's the one accepting offers and that if he doesn't get the right offer, he will just stay where he is, he doesn't need to move out of his flat.

I'm confused as to how this part exchange works - does my colleague still own the property and ultimately will my offers make it through to him, or am I actually only concerned about and dealing with the builders who have the listing on (as the estate agent has said).

I just don't want to be negotiating with a party that doesn't ultimately have say on what the selling price is going to be. My best guess is that my colleague has agreed a part exchange at a base price and whatever they sell for above that, he gets to keep. He's hence trying to go round and directly pressure me into putting a higher offer. The property developer/part exchange company aren't fixated on 185k because the agent mentioned he sees the deal happening between 175-180k, and I'm assuming it's because as long as they can get it sold for the base price they agreed with my colleague, they would sell it.

Does anyone know what's going on and have any advice? I've currently kept it low with the colleague and just dealing with the agent instead.

The first property I bought had been taken by a builder as a part exchange and the only party I dealt with was the builder not the people that builder had taken the property from in the part exchange.  It was advertised at a fixed price and I offered a bit less and my offer was accepted.  

Do you have your heart set on this property?  Have you looked at any other properties?  Unless you really, really want this one I'd walk away now before you spend any money trying to buy it.  I'm not really sure where your colleague fits into the transaction between you and the builder.

AdrianC

The agent is right. If your colleague has PXed it as part of his exchange of contract with the builder, then the vendor is the builder. They're the ones that accept or reject the offer, and your colleague has nothing to do with the decision. And if your colleague has exchanged contracts, he's bound by the contract unless and until the builder breach the long-stop date. If they've already sold his old flat (to the point of exchange), then he's out of luck all round.

I'm not surprised they'll turn down £170k, against a guide of £185k, especially if it's only just gone on the market.

unr

Lover_of_Lycra said:

unr said:

Hi all

First time buyer here. Currently made an offer for a flat, but in a bit of a confusion, thought you guys might be able to help.

A colleagues had a flat he was looking to sell, so I arranged to go for a viewing. Liked the place and arranged subsequent viewings for the place through the estate agent. Colleague has a reserved plot for a new build house with Taylor Wimpey who I've been told have a part exchange agreement for the flat.

Colleague had been pressuring me to put an offer in and book viewings, so that interest on the flat was active, before the listing went down. The listing has been put up by the builders, Taylor Wimpey.

The flat was advertised as market guide price of 185k. I emailed the estate agents with an offer for 170k, and simultaneously messaged my colleague as well saying I've put an offer for 170k and we can go from there.

He's instantly turned it down and been quite harsh about it - from his language it seems like he wouldn't even accept an offer for 184,900 let alone 170k.

I then had an email from the estate agent saying the offer has been rejected, would you like to offer 175k. I gave him a ring and the agent says that my colleague is actually going to be out of the chain, and will be moved to a rental if the paperwork is completed before build. The agent says he's not dealing with my colleague at all and that his client is the builders who are the people accepting and rejecting my offer. He suggests I shouldn't speak to my colleague directly as he's not involved.

This contradicts what my colleague is telling me directly - that he's the one accepting offers and that if he doesn't get the right offer, he will just stay where he is, he doesn't need to move out of his flat.

I'm confused as to how this part exchange works - does my colleague still own the property and ultimately will my offers make it through to him, or am I actually only concerned about and dealing with the builders who have the listing on (as the estate agent has said).

I just don't want to be negotiating with a party that doesn't ultimately have say on what the selling price is going to be. My best guess is that my colleague has agreed a part exchange at a base price and whatever they sell for above that, he gets to keep. He's hence trying to go round and directly pressure me into putting a higher offer. The property developer/part exchange company aren't fixated on 185k because the agent mentioned he sees the deal happening between 175-180k, and I'm assuming it's because as long as they can get it sold for the base price they agreed with my colleague, they would sell it.

Does anyone know what's going on and have any advice? I've currently kept it low with the colleague and just dealing with the agent instead.

The first property I bought had been taken by a builder as a part exchange and the only party I dealt with was the builder not the people that builder had taken the property from in the part exchange.  It was advertised at a fixed price and I offered a bit less and my offer was accepted.  

Do you have your heart set on this property?  Have you looked at any other properties?  Unless you really, really want this one I'd walk away now before you spend any money trying to buy it.  I'm not really sure where your colleague fits into the transaction between you and the builder.

Why would you say I should stop considering it? Does it sound dodgy? 
I'm also confused why my colleague is getting involved - he also mentioned that he doesn't need to sell his flat and so if he doesn't get the right offer he would just continue to stay at his flat. Could that mean they haven't exchanged contracts yet? 

Or is there a chance that he is trying to pressure me into putting a higher offer so he can get more money (I'm not sure what sort of agreement that would have to be between him and the property developer)....

Help please, and thank you

unr

AdrianC said:

The agent is right. If your colleague has PXed it as part of his exchange of contract with the builder, then the vendor is the builder. They're the ones that accept or reject the offer, and your colleague has nothing to do with the decision. And if your colleague has exchanged contracts, he's bound by the contract unless and until the builder breach the long-stop date. If they've already sold his old flat (to the point of exchange), then he's out of luck all round.

I'm not surprised they'll turn down £170k, against a guide of £185k, especially if it's only just gone on the market.

Is there a chance they haven't exchanged contracts?

What's the long stop date?

He keeps mentioning he doesn't have to move if he doesn't get the right price.

The property has been on the market for 5 weeks now, and the offer for 175k has been rejected. Agent seems to suggest 180 will do the deal.

[Deleted User]

It just seems like this property is a bit of a hassle for some reason when it shouldn't be and very early on in the process. Would you even have looked at this property if your colleague hadn't suggested it? What else is on the market

Either he's exchanged contracts which includes the part exchange meaning he has naff all to do with you trying to buy it now or he hasn't exchanged contracts at all and is just dicking everyone around. 

[Deleted User]

Personally, I'd walk away. Not worth the trouble with colleague and EA who obviously isn't playing a straightforward game and trying to get you to increase your bids.  However offering 170k on a property that is probably already discounted in order to sell quickly could have been a waste of time. Probably accounts for colleague's reply.., he's aware of the value of the property if he hadn't part ex'd it.

unr

The agent seems to think my colleague has nothing to do with this. Perhaps it's become confusing because he's been involved whereas if I didn't work with him I wouldn't even have dealt with him? 

I would have seen it, I've seen about 20 others and I've come round to it. 

Just trying to be cautious if someone thinks this is a red flag...
Lover_of_Lycra said:

It just seems like this property is a bit of a hassle for some reason when it shouldn't be and very early on in the process. Would you even have looked at this property if your colleague hadn't suggested it? What else is on the market

Either he's exchanged contracts which includes the part exchange meaning he has naff all to do with you trying to buy it now or he hasn't exchanged contracts at all and is just dicking everyone around. 

AdrianC

unr said:

AdrianC said:

The agent is right. If your colleague has PXed it as part of his exchange of contract with the builder, then the vendor is the builder. They're the ones that accept or reject the offer, and your colleague has nothing to do with the decision. And if your colleague has exchanged contracts, he's bound by the contract unless and until the builder breach the long-stop date. If they've already sold his old flat (to the point of exchange), then he's out of luck all round.

I'm not surprised they'll turn down £170k, against a guide of £185k, especially if it's only just gone on the market.

Is there a chance they haven't exchanged contracts?

Of course there's a chance. And if that's the case, then the builder can't sell it, because they aren't contractually bound to buy it.

What's the long stop date?

It's the date that the contract is void if they haven't finished building the place. If they're already marketing the PX, and saying "Well, he'll move into a rental", then I'd presume that's covered in the contract - they'll simply give him the PX value instead of his old keys back.

He keeps mentioning he doesn't have to move if he doesn't get the right price.

He can insist all he likes - that doesn't make it true. If he's already exchanged on the PX, then that side of the deal is done.

The property has been on the market for 5 weeks now, and the offer for 175k has been rejected. Agent seems to suggest 180 will do the deal.

But that doesn't alter the question of who is the actual vendor. If your offer is accepted, you'll get the memorandum of sale through. If it isn't, it doesn't matter.

diggingdude

Don't mix work life and home life.  find another place