Part Exchange Price Fixing!

georgia_domino

Hi,

I am looking at buying a new build property and have had my house valued by three independent local estate agents. All three quoted very similar figures;

Asking price £165,000
Potential selling price £155,000
Quick sale price £140,000

We have had our house valued by both Redrow and Persimmon, who use the same estate agent Payton Jewell Caines for their valuations. They have quoted a part-exchange price of £125,000 well below our other independent valuations.

They have based this on the house next door which is also for sale and not surprisingly was also valued by them.

The reason that the house next door is on for £125,000 is because it too is a part exchange property and has been valued low to meet the 35% price differential that new build properties developers insist on.

The house we are hoping to purchase will allow for a part exchange value of £140,000 and still meet the 35% differential.

Where do I stand with regards to the low valuation, it would seem that my house is being valued artificially low by the estate agent who will then be responsible for selling it once I part exchange with the developer.

Thanks

Jorgan_2

What have other,similar properties in your street actually sold for? Not asking price, but actual sold prices.

A part ex price will often be lower than a sell it yourself price. Have you spoken to the builders regarding the difference in figures that you have been quoted?

Can you post a Rightmove link to the neighbouring property?

glen8

DONT fall for the 'the part-ex offer will be low because we are a cash buyer and the benefit is in the easy sell with no estate agents fees' rubbish

We got £10,000 MORE than what ours is worth plus an extra £40,000 discounts against the new build due to the state of the economy

The builders will tell you ANYTHING to get at your money!!

georgia_domino

Similar house across road sold last month for £155,000.

Dont really mind ours being valued low if developer also lowers their price, at the end of the day its the difference between ours and theirs that matters.

House we are looking at is valued at £220,000, they have reduced to £215,000 but only offering £125,00 on ours.

They are claiming that there is no negotiation on offer, we either take it or find somewhere else.

ginvzt

Well, then tell them you are going to find elsewhere. And that they can keep their house on the market for another 6 months waiting for the prices to drop.

Just an idea - get a different developer to value your house for part exchange... And see what they offer, even if you are not thinking to proceed... Might be worth a shot?...

chickmug

It is possible that the new homes builder sets the criteria for the EA's they use to value. Along the lines of needing the valuation to recognise it is very very realistic and to be the most competetive for a property of that sort currently on the market, the that area, so assuring them of a quick re-sale.

It is most unlikely that the builders would conspire together to 'price fix' but highly likely they each would put pressure on the agent. The EA would want ongoing work from that builder.

ferritt_2

Hi,

I had the very same problem around 8 months ago. Was moving to a new DW home. Builder reduced price from 200k to 197k and gave us a part ex price for ours of 112k. There were saying the offer was really 115k because of the reductions in the newbuild home. Our house was on the market for 125k. I was willing to exept 120k. The builder said this this was a take it or leave it offer. In the end I left it. At the time it was a really hard decision to make. But 8 months on the builder still hasnt sold the house and because of time scales there had to put in a bog standard kitchen etc.. so have lost the selling factor for that, + the price has been reduced slightly. just remember in the current house buying climate there want to sell to you so you have to get the best deal for yourself. If your happy to accept the offer go for it but if you want more tell them if there say no they'll contact you again. The builder will never just say no and thats it.

cheers

Kez100

My feeling is, as we see more downward pressure on prices, the deals on new build will be better for a buyer than a part exchanger as the latter includes property which they need to know they can shift to make it cash.

Have you considered marketing your home?

teabelly

It's a new build. Look at second hand equivalents selling now ie those more than 2 years old. That is what your new build is really worth. They can value it at any price they like and will have chosen an EA that will make their over priced rabbit hutch seem good value. If other houses in your street have sold within the last 6 months for 155k then that is roughly what yours is worth. It is your choice whether you accept a low offer in exchange for an over priced new build. The cost to change to you will be about 50k down the drain as they are under paying for your house by 25k and theirs will be at least 25k over priced. Also if it is built by the likes of persimmon it will probably be poor quality and falling to bits within a few years anyway.