If you are thinking about buying a new build property but are really struggling to sell your current home, estate agents in Leeds recommend opting for a house part-exchange. While this may sound like a relatively new concept, house-part exchange has become rather popular in the UK in the past few years. Essentially, the part-exchange scheme allows homeowners to trade in their current home for a new build, directly through the builder or developer.
So, what is a part-exchange? In simple words, the part-exchange scheme allows a buyer to buy a new-build property before selling their existing home. Instead of selling their home using traditional methods, the property developer or the builder of the new-build will buy the current property of the buyer. Then, when the final purchase goes through, the developer will deduct the price of the original property from the price of the new property. This is a win-win situation for the buyer and the builder.
Part-exchange, or PX, as it is often referred to in the real estate industry has become very popular among big builders and developers in the UK. Barratt, Linden Homes, Crest Nicholson and even Persimmon offer the part-exchange scheme. In fact, Linden Homes sold 22 out of its 92 new builds in Yorkshire based on the PX scheme! Usually, a home part-exchange scheme works great for people who are either struggling to sell their current home or for those who are looking to move out of their new home quickly. PX is also ideal for sellers who want to avoid the hassle of putting their house on the market, the ones who want to be chain-free as well as those who do not want to pay estate agent fees. Also, since the developer is buying the current property of the buyer, this ensures the builder that there is a guaranteed buyer for the new property.
How does PX work?
First, you need to find a new build that you would like to purchase through a developer or a builder that offers the part-exchange scheme. The builder will then value your current home; the standard practice is to get the valuation from 2 independent estate agents. Based on these valuations, the builder will come up with an average purchase price and then make you an offer to buy your existing property. If you accept the offer price, the deal is done. With that being said, it is important for homeowners to conduct property valuations themselves too, so that they have a fair idea of how much their property is worth. This way, homeowners will know if the offer made by the builder is fair or not. Once you accept the offer, you are then expected to secure a mortgage to pay for the new build and hire a solicitor who will then complete the sale process.
Usually, developers and builders offer the PX scheme to buyers whose houses are valued no higher than 70 per cent of the total value of the new build. If there is less than a 30 per cent difference between the value of your existing home and the new build, then most builders and developers will hesitate to make an offer as the sale is no longer profitable for them.
Is house part-exchange a good idea?
Yes, the PX scheme is great for potential buyers who are looking to climb the property ladder. For one, it is a much quicker sale and purchase process. In the UK, it takes 50 to 60 days on average to find a new buyer. Then, the process of house hunting can take anywhere from 1 to 3 months. On the other hand, the PX process means no waiting time when it comes to buying and selling. Also, there is always a fear that the buyer could drop out at the last minute. But, with the part-exchange scheme, both parties have the security that the sale is guaranteed. Usually, when a homeowner puts their home on the market, they have to deal with weeks and weeks of open houses, house viewings and estate agent meetings. The PX scheme totally gets rid of all this hassle. There are no house viewings or estate agents, there is no property chain nor is there any level of uncertainty and the sale process is essentially seamless.