In a slow market, part-exchanging your property may be the answer to your moving dilemma...
When considering moving house, the first idea that enters most people’s minds is their new home: often bigger, in a better location, in short, the property of their dreams. The reality of actually selling your existing property is something many would-be movers would rather not face: decluttering, endless tidying so swathes of viewers who may or may not be genuinely interested come traipsing through your living space, waiting for ‘the chain’ to complete.
However, there is an alternative – part-exchange. Known as PX in the trade, it enables you to part-exchange your home for a new build via the developer – in the same way, you would a car. Your existing property acts as part-payment and cuts out the need for estate agents, chains and so on.
“In simple terms, part-exchange is essentially trading a house you already own to move up the property ladder against the value of a new home,” explains Marcus Evans, sales and marketing director at Crest Nicholson Regeneration. “The developer of a new-build purchases your existing property and the value is taken away from the price of the property you are buying.”
The schemes are popular when markets are slower or vendors have found selling their property particularly difficult. However the numbers of those taking up such schemes remain relatively small – in 2012 Barratt Homes said around 15% of sales were part-exchange – which Evans says is down to the fact that a lot of homeowners don’t know it’s out there.
“Unfortunately, many people still associate part-exchange with trading in a car, not a house. Although the transaction is far more important, the principles are the same, and there are many benefits to part-exchanging into your dream home.”
However, in times of property boom, there are those who claim that developers fail to keep pace with the market, offering would-be movers less than they may be able to achieve on the open market. Evans insists this is not the case where Crest Nicholson is concerned, saying: “The process of part-exchanging a home is very robust and ensures homeowners get fair market value for their current home. For every part-exchange we obtain independent valuations from three different high-street estate agents and the offer made will be based on these third-party valuations. All feedback from agents is completely transparent and our customers are talked through the process to ensure they know how all offers are calculated.”
In order to qualify, your home usually has to be worth between 65%-75% of the new property (although this varies from developer to developer). It must be in a good state of repair and some dwellings (such as mobile homes) may be excluded. As with a normal sale, a survey will be required. If all parties are in agreement, then the deal goes ahead – omitting the lengthy negotiations with buyers, their agents and solicitors. The good news is, if your new home isn’t yet ready to move into, you can stay in your current home.
According to Evans, the benefits of PX are many, with “the guarantee of a cash purchaser” being the main one. Plus, as you are only dealing with a developer, the stress of moving can be less as the process is accelerated. And, Evans points out, “Part exchange is a great money-saver as there are no agent’s fees and there is a guaranteed streamlined transaction with professional support and guidance throughout.”
