Part exchange explained
We find out how part exchange can help with buying a new-build home, saving you time and money in the process. We answer your questions below with the help of Kier Living who offer part exchange on a number of their developments.
What is part exchange?
Part exchange works in exactly the same way as the normal buying and selling process, the only difference is that it’s a developer who purchases your home and discounts the value of it from a new-build property. Exactly how the scheme works varies from developer to developer, but as a general guide it is worth bearing in mind the following:
What are the benefits of part exchanging your home?
Part exchanging can greatly speed up the time it takes to move home as you won’t get held up in a chain and be dependent on other people’s timescales and you are guaranteed a sale at the end of it.
Purchasing a home in this way is great for people who are looking to move up the property ladder as the house they are selling will tend to be worth approximately 70% of the one they are looking to buy. The scheme is not generally suitable for people looking to downsize as the home they currently own is usually worth more than the new property.
What is the process for buying part exchange?
Once you have found a property you are interested in purchasing, the developer will normally obtain two or three independent estate agent valuations of the one you wish to sell. This valuation will usually be based on the selling price of the home rather than the asking price.
After receiving an offer from the developer, a survey of your home will be arranged to ensure it is structurally sound. Once you have received and accepted the offer, if you have not already done so, you should arrange a mortgage and engage the services of a solicitor or conveyancer.
Some developers may ask for a reservation fee to secure the property. After this, it typically takes approximately four weeks to exchange contracts and it is at this point you would pay a 10% deposit.
Once funds are released from your mortgage lender, you can complete the purchase.
Are there any drawbacks to selling your home part exchange?
Although part exchange can be a much quicker and simpler way to buy a new home, there are some factors that should be taken into consideration before doing so.
As the valuation of the home you are selling will be based on the anticipated sale price rather than the asking price, it is possible you will be offered less than the market value of your home.
Developers will be looking to sell your home on quickly, it must therefore be structurally sound and in generally good condition. Some types of property may be excluded from part exchange, such as those with flat roofs or leasehold properties with less than around 80 years on the term remaining.
If you’re interested in purchasing your next home with part exchange, Kier Living has a range of 4-bedroom properties available including those at Elms Croft in Long Melford, Sudbury. The last 15 homes on this well-planned development come with a 10 year NHBC warranty plus 2 years Kier Living customer care support, for your peace of mind.
Part exchange will be considered on many plots, subject to terms and conditions. Kier Living will make sure the move is straightforward with friendly, efficient service from their professional sales team to guide you through the process.
Once the current market value of your home has been established through a minimum of three independent valuations, you may be made an offer subject to contract. If you accept, you will be kept fully informed right up to exchange of contracts when you will be able to agree a mutually convenient completion date.
Click here for details of plots at Elms Croft where part exchange is available or contact our Sudbury team on 01787 327000.