by Mark Johnston
Part exchange is a concept that was pioneered around 30 years ago by Barratt homes yet some people are still unaware of this concept.
Some experts reckons that around £100 million worth of houses are bought and sold in this way every year.
According to Barratt homes, they have seen a 42%rise in part exchange over the past 6 months compared to the same period a year ago.
With the property market at a standstill in the current economic crisis many home owners have been struggling to sell their homes.
Whether they are about to welcome a new addition to their families, they need to relocate or they simply want to move to a better property, then a part exchange scheme could actually be the perfect solution.
Most of the major house builders offer part exchange schemes including Bovis homes, Lunden homes, Bellway homes, Taylor Wimpey homes, Permission homes and of course Barratt homes.
Award winning developer Redrow homes state that “ would be home buyers have nothing to lose and everything to gain by discovering the advantages of part exchange”.
Part exchange simply allows home owners to ‘trade in’ their property as part payment for another. However these particular schemes are only available when purchasing a new build property.
The advantages of these schemes for house builders is it helps them to secure buyers for new builds in a slow market and also it can allow the builders to sell on the part exchange properties for a possible profit.
There are main advantages for the seller/buyer one of the main ones is that the whole process can be wrapped up in just a few days, compared to the 11 months that recent research has shown it can now take to sell a house on the open market. They therefore also gain a definite moving date.
Other key benefits to part exchange are: A guaranteed buyer for the existing property. No estate agents to deal with and therefore no fees to pay.
Part exchange can also take the stress out of selling a property as there are no fears from the buyers pulling out at the last minute and deals caused by people further up the chain.
Once the home owner has decided to go down the option of part exchange, the house developers will arrange for at least 2 independent valuations on the property and then make an offer based on these valuations. Typically they will offer around 90% to 95% of the market value, however it is a guaranteed sale.
Although Barratt homes have claimed that they offer 100% of a properties market value, based on the 2 valuations.
Giles Mackay of PXS, a specialist house dealer admits that buyers get a slightly lower price for their existing property, but maintains that “this is not a significant problem after saving on estate agents fees”.
Not all properties however are deemed suitable for part exchange as there are stipulations about the value and the type of property. Properties that maybe excluded are :-
Commentators agree that, when part exchange increases, it may be a sign that the property market is heading for trouble
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