Part exchange extra scheme

lis1320

The sellers of the property we’re buying are selling it via part exchange extra with a building developer. They are getting a new build, and the part exchange extra scheme allows them to try to get a buyer themselves first, decide on the sale price etc., and if they don’t sell, the developer will then part exchange with them. If exchange happens within 42 days, the sale is treated as assisted sale, and if it takes longer, it will be a part exchange with the developer.

We’ve had an offer accepted and have been given 42 days to exchange, since the new build developer is driving this. 

Our solicitor seems concerned that we are in a contract race as he believes draft contracts were issued to us and the developer, with whoever is ready first winning the purchase. I’ve spoken to the New Homes Group (who represent the developer) and they assure me this is not a contract race, and the issuing of draft contracts is normal, as it will allow the developer to proceed with the part exchange purchase should we pull out/not meet the deadline.

This seems fair to me, but our solicitor is still concerned and feels we should ask the sellers to cancel the part exchange and just proceed with a normal sale to us. I can’t imagine them agreeing to this, I wouldn’t if I were them. 

With regards to the 42 day deadline, we are worried about not meeting it since searches alone can take this long. I’ve read plenty of part exchange threads where many posters say the developers can be lenient with this as long as the sale seems to be progressing. However since this is a slightly different scheme, I’m not sure whether the missing the deadline will result in the property automatically being sold to the developer. New Homes Group advised me that this won’t matter to us, since we would then buy from the developer instead of current owners. Again, the solicitor suggests we have no assurances that this would actually happen, and we might lose out on the home. 

Has anyone had any experience with this part exchange extra scheme? 

Any ideas on how to proceed? 

user1977

If the timescale for getting searches is the main concern, have you investigated getting search insurance instead?

lis1320

user1977 said:

If the timescale for getting searches is the main concern, have you investigated getting search insurance instead?

After I posted I checked my email and the solicitor emailed us that the developer provided the searches and they are in date. This will definitely save significant time.

I can see some time going into our solicitor wanting clarification on the ‘contract race’ which the seller’s solicitor says there isn’t. However, by definition, that’s what issuing contracts to two parties would be. 

chanz4

user1977 said:

If the timescale for getting searches is the main concern, have you investigated getting search insurance instead?

a lot of providers wont take we found