Part Exchange on A New Home Could Speed Things Up
2 minute read
One of the biggest risks when moving house is the buyer of your existing property dropping out for whatever reason: perhaps they can’t get a mortgage, or they simply change their mind when their own sale falls through.
It can be costly, with legal and other fees starting to add up, depending how advanced the transaction was. Estate agents don’t always monitor progress as regularly as they should, failing to pick up issues along a chain which could impact a deal, but sellers can still be liable for their fees.
To avoid such pressures, some developers are offering part exchange on a new purchase, speeding up sales, enabling buyers to benefit from the extended Stamp Duty holiday.
Ensuring fairness to all parties, the developer seeks three independent valuations of the property to be part exchanged and agrees a price with the seller, enabling it to be marketed by the chosen estate agent. In the event of a buyer not coming forward within a given period – usually about 4 weeks – the developer pays the agreed price to the seller, allowing their own new property purchase to proceed.
Such schemes have the advantage of reducing costs, as well as a lot of the stress, with developers handling agents’ fees and sometimes even helping with removal arrangements.
However, before being tempted into making such a commitment, check that the new home actually meets your criteria: location, number of bedrooms, living area layout, outside space and parking, as well as access to schools and work. As with any purchase, some flexibility is inevitable, but if the general ‘feel’ is right, then it is time to seek advice on its affordability, and whether part-exchange is the best option to deliver your plans.
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