Many people would like to take the hassle out of selling a house in the UK. They find the process takes too long, costs too much money and is stressful.
There are other ways of selling compared to the traditional way of selling your house using an estate agent. We look at how part exchange schemes work for houses in our latest blog.
How does part exchange work with homes?
If you are aiming to buy a new build property, wouldn’t it be good if you could guarantee the sale of your old house? Then move into a new build house soon afterwards.
That is the selling point for part exchange schemes. But if you are thinking of going ahead, make sure you do your research first.
Part exchanges house schemes are not a new idea. These are schemes where buyers “trade in” their existing property against a brand-new house.
They are run by many of the major housing developers and builders who build new property estates across the UK. The process work be helping the developer secure the sale of their new build property at the same time as buying your existing house at an advantageous price. If you have recently been wondering how does part exchange work this is how the developer creates their profit margin.
For homeowners who are struggling to find a buyer for their property, and want to avoid the hassle of being in a property chain, part exchange may help. Part exchange schemes are an ideal way out of a broken house chain too provided you have sufficent equity in your current house. Another benefit is that part exchange schemes avoid the need to pay estate agents’ fees.
What are the stages of part exchange?
There can be variations between the big property development companies, so look at their websites and read about each part exchange scheme.
But usually, a scheme works something like this:
• Look for new build properties in an area that you want to live in where a part exchange scheme is offered. To start the process, either use their website, talk to sales staff on site or speak to your local estate agent.
• Choose the new build property you want to buy that is within your budget. New build houses have both up and downsides. See our thoughts on this below.
• Developers will usually instruct two independent estate agents or valuers to visit your house to determine the true value of your property.
• The next step is when you receive an offer to part-exchange your house. This will be subject to a property survey.
• If you decide to accept this offer, you need to arrange a mortgage on your new home. Always shop around for the best mortgage you can find.
• The next step is choosing a solicitor or conveyancer. They will do the legal work necessary to help you complete the sale.
• Expect the developer or builder to ask you to put down a deposit or “reservation fee” on your new build house.
• If no serious problems have been discovered with your old home in the survey, you should be able to exchange contracts within just a few weeks. This is when you will need to pay the deposit.
• Once the monies have been released, the sale can be completed. You can then move into your new house.
• This article in What House? explains more about how part exchange works.
New build properties – the pros and cons
Remember, as good as part exchange schemes may look on the developer’s website, you can only trade in your existing home against a new build. And this must be for a new property worth more than your current house.
New builds can be good, as you start with a “clean slate” property. No-one will have lived there before and the house will be new from the ground up, along with its fixtures and fittings.
That can be appealing. Also, new build estates tend to be well located with good facilities nearby.
Beware, though, that new build houses often have smaller rooms than many older properties on the market. Drive around a new build estate and you will see the properties usually overlook other houses. This is because they are usually built close together, with small gardens. New builds often have small drives, which cause problems with parking.
New build properties also often come with snagging issues upon completion. A survey by the House Builders’ Federation and NHBC found that 42% of buyers had reported more than 10 problems with their new-build to their builder. And some builders can be slow to resolve these.
While this may not be a factor as many new build customers are happy with their home, buyers looking for a “character” house will search for other properties.
Once you have bought your new build, you may find it becomes trickier to sell in future. Developers may build an estate of smaller and/or newer houses nearby, after yours is finished.
Part exchange schemes work best if you are looking to buy a new build house quickly without the hassle of having to sell your own home via a traditional estate agent. They work best at times of a broken or failed house chain when they can offer genuine certainty in an otherwise tricky housing market.
You can find out a great deal more about how these scehemes work in our Ultimate Guide to Part Exchanging Your House.
Are you considering buying a new build house via a part exchange scheme? Let us know your thoughts on our blog by leaving a comment below. We’d love to hear from you.