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Buying old property via new-build developer acting for vendor

Hebblethwaite
Posts: 169 Forumite


This is a little complicated, but I'll try to be succinct:
The vendor (A) of an older (e.g. 1930s) property wants to move into a new build that has not yet been finished.
The new build developer has accepted A's offer on the basis that they will also manage the sale of A's existing property. A would probably struggle to coordinate this for themselves and has made an informed decision to let the developer act for them in this way.
The older property has not been part-exchanged for the new build and there is no intention for this to occur. It will never belong to the developer.
The older property has been marketed via local estate agents and a potential buyer (B) has been found.
B made an offer and passed the EA's initial financial checks. B was then told that the actual sale would not be managed by the EA and that the EA's role was just to advertise the property/make introductions. The EA cannot put the offer to the vendor, but has informed the developer that an offer has been made. The developer will now contact B to go through financial information again, before deciding (along with A) if they will accept the offer/negotiate. If an offer is accepted, the remainder of the sale will proceed with the developer taking the role usually performed by the EA.
The developer has a reputation for trying to get buyers to pay for things that should be a vendor's responsibility (like indemnity or searches/valuations they have done themselves before agreeing to act on the vendor's behalf) but B is wise to this and will make sure to instruct a solicitor who will keep a close eye on any unreasonable demands.
Should B be concerned about this situation, or is this actually a relatively common practice that B has just never come across? Is a degree of wariness and a good solicitor enough for such a purchase to be sensible, or should B be running for the hills as fast as their little legs can carry them?
The vendor (A) of an older (e.g. 1930s) property wants to move into a new build that has not yet been finished.
The new build developer has accepted A's offer on the basis that they will also manage the sale of A's existing property. A would probably struggle to coordinate this for themselves and has made an informed decision to let the developer act for them in this way.
The older property has not been part-exchanged for the new build and there is no intention for this to occur. It will never belong to the developer.
The older property has been marketed via local estate agents and a potential buyer (B) has been found.
B made an offer and passed the EA's initial financial checks. B was then told that the actual sale would not be managed by the EA and that the EA's role was just to advertise the property/make introductions. The EA cannot put the offer to the vendor, but has informed the developer that an offer has been made. The developer will now contact B to go through financial information again, before deciding (along with A) if they will accept the offer/negotiate. If an offer is accepted, the remainder of the sale will proceed with the developer taking the role usually performed by the EA.
The developer has a reputation for trying to get buyers to pay for things that should be a vendor's responsibility (like indemnity or searches/valuations they have done themselves before agreeing to act on the vendor's behalf) but B is wise to this and will make sure to instruct a solicitor who will keep a close eye on any unreasonable demands.
Should B be concerned about this situation, or is this actually a relatively common practice that B has just never come across? Is a degree of wariness and a good solicitor enough for such a purchase to be sensible, or should B be running for the hills as fast as their little legs can carry them?
0
Comments
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Not uncommon at all. A large number of part-exchanges work this way.
1 -
Thanks, Slithery. I have read about part exchanges with developers before, but not this scenario where an older property sale is managed by the developer but without ever being part-exchanged. Is that also common?0
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Happened with the house next door to us. Our old neighbours knew a little about the buyers and told us about their occupation. The new people moved in two weeks after the old neighbours moved out.
Developers used to buy property, but that takes capital. Now they try to coordinate it with some guarantees that the new house buyer won't be left owning two houses.
You have identified that the current owner would find a sale difficult, whereas the developer sells houses for a living.1 -
It sounds like an 'Assisted Sale' or 'Assisted Move' scheme that some newbuild developers offer.
I suspect that some developers are easier to deal with, and others are more difficult. If you mention the name of the developer, perhaps you'll find people who have dealt with them before.
As for the buyer paying for things that the vendor normally pays for - that's all down to negotiation. It's like 'difficult' sellers who accept your offer, then try to make you pay extra for fitted carpets, built-in oven etc.
I guess that if you anticipate that they're going to want to add £2k in fees to the sale price, you could compensate by offering £2k less for the property. Or maybe make it clear what fees you will/won't pay when you make your offer.
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Thank you all for the reassurance. I, um I mean B, made an offer and it was accepted1
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No matter who or where or what house you buy the buyer pays for searches and valuations. Indemnity again that is loose as its up to the buyer if they feel they need it (the vendor could pay but doesn't have to). This is the process everyone goes through when buying a house.1
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Glad it worked out for "B", OP.
The part-ex deals that some developers offer often work in this type of manner, so that the developer never has to actually own the property. It is a bit like a car dealer posting an advert for a car for sale with "due in soon".1 -
Irishpearce26 said:No matter who or where or what house you buy the buyer pays for searches and valuations. Indemnity again that is loose as its up to the buyer if they feel they need it (the vendor could pay but doesn't have to). This is the process everyone goes through when buying a house.0
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