Break­ing the chain of risk to get a brand new home

Part ex­change is more pop­u­lar than ever with peo­ple who want to get mov­ing. Sharon Dale re­ports.

Yorkshire Post - Property - - FRONT PAGE -

THE chances of a prop­erty deal col­laps­ing are high in a mar­ket where buy­ers are ner­vous and mort­gage lenders are apt to change their minds.

Chains reg­u­larly break down leav­ing mis­ery and stress in their wake, as John and Karen Bel­lis know only too well.

The cou­ple and their two chil­dren were packed and ready to move into a brand-new de­tached house when they re­ceived a call from their solic­i­tor.

“We thought he was go­ing to ask us to come and sign con­tracts but he told us that the per­son at the bot­tom of the chain had pulled out, mean­ing our buyer wasn’t in a po­si­tion to pro­ceed. We were ab­so­lutely dev­as­tated,” says John.

“My daugh­ter had al­ready planned her new be­d­room and we’d packed most of our be­long­ings.”

John and Karen had pre­vi­ously asked Miller Homes about part ex­chang­ing their ex-coal Board semi, which was val­ued at £115,000 by an es­tate agent, for a new four-be­d­room de­tached. The de­vel­oper of­fered them £97,500.

“At the time we thought we’d try our luck on the open mar­ket and we ac­cepted £106,000 from our buyer.

“But when we went back to ask Miller Homes if they could help us when our sale fell through they were fan­tas­tic and of­fered us £100,000,” says John.

“We had al­ready paid Miller £5,000 for a whole host of ex­tras for the new house and if we had pulled out of the deal we would’ve lost that money so all in all we thought the part ex­change was a great so­lu­tion.”

The Bel­lis fam­ily were in their new £194,000 prop­erty within six weeks.

“I can’t tell you what a re­lief it was and how much stress it took off our shoul­ders. Yes we took a lower price for the old house but it was worth it and be­cause the new house is so well in­su­lated our bills are half what they were,” says John.

The mes­sage is that you may have to take a be­low mar­ket value price for your house if you part ex­change for a new-build as the de­vel­oper will need to sell your old prop­erty on quickly. But the swap should pre­vent heartache and has­sle and it will get you mov­ing.

The Miller Homes ex­change scheme al­lows buy­ers to swap their home for a new one whether they are look­ing to up­size, down­size or buy like for like. It marks a de­par­ture from tra­di­tional part-ex con­di­tions, which usu­ally re­quire the buyer to pur­chase a prop­erty worth at least 30 per cent more than their ex­ist­ing home.

“Steve Mcel­roy, sales di­rec­tor for Miller Homes York­shire, says: “In­ter­est in part ex­change is strong and has been from the be­gin­ning of the year. We have seen a lot of in­ter­est from peo­ple whose homes are not yet on the mar­ket, which is mainly due to the per­ceived dif­fi­cul­ties with sell­ing their ex­ist­ing prop­erty in cur­rent mar­ket con­di­tions.”

Most vol­ume builders have swap schemes and an in­creas­ing num­ber of smaller de­vel­op­ers are us­ing them, though they may not shout about it.

“Smaller de­vel­op­ers will of­ten con­sider part ex­change be­cause it’s a way of cre­at­ing cash flow, though they have to be able to buy at the right price. So even though it may not be men­tioned in the brochure it is well worth putting the sug­ges­tion to them,” says Tony Wright, head of res­i­den­tial at Carter Jonas, Har­ro­gate, who adds that the prac­tice is also be­com­ing more com­mon in the sec­ond-hand homes mar­ket.

“We’ve come across sit­u­a­tions where it has been a good prob­lem solver in cases where there is a rea­son­able price dif­fer­en­tial,” he says.

But although swaps take place, Tony doesn’t be­lieve it is a good idea to pub­li­cise the pos­si­bil­ity when ad­ver­tis­ing a prop­erty.

“It’s an ac­cepted in­cen­tive with new homes but in the sec­ond-hand mar­ket say­ing ‘part ex­change con­sid­ered’ can hint at des­per­a­tion.

“It’s some­thing that is best ex­plored with prospec­tive buy­ers and en­gi­neered by the owner and their es­tate agent.”

PROB­LEM SOLVED: John and Karen Bel­lis with a Miller Homes ad­viser. The cou­ple part-ex­changed their home for a new one af­ter a sale fell through.

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