Part-ex'ing a property to a housebuilder - pros and cons?
Discussion
Persimmon are building a new development near me which - contrary to my previous disparaging comments about new-build estates - actually looks nice and doesn't appear to be the typical 'cookie-cutter, pushed-to-the-very-edges-of-the-plot' designs. I'm going to have a look at the weekend.
One of the things they can do is part-ex which, as far as I can see, would actually save a lot of hassle and cost... AIUI, typically with a new-build you'd need to have your existing place sold and be ready to go as soon as they come back and say "Your house is built.." which would mean renting between the sale of the current place and moving into the new one which is a huge waste of money.
I'm guessing that they'll be very keen to shift a new home (with whatever margin they have in it) so it's not in their interests to offer too far below market rate - and I would benefit from
Just trying to go in with eyes open and somewhat informed...!
One of the things they can do is part-ex which, as far as I can see, would actually save a lot of hassle and cost... AIUI, typically with a new-build you'd need to have your existing place sold and be ready to go as soon as they come back and say "Your house is built.." which would mean renting between the sale of the current place and moving into the new one which is a huge waste of money.
I'm guessing that they'll be very keen to shift a new home (with whatever margin they have in it) so it's not in their interests to offer too far below market rate - and I would benefit from
- an easy sale
- no agents to deal with
- no agents' fees
- no strangers traipsing round doing viewings
- no getting caught in a chain/chain collapsing
- as mentioned get to stay where I am until the new place is ready and don't waste money on renting somewhere
Just trying to go in with eyes open and somewhat informed...!
We did it once.
The first of these was not an advantage: they did want to do viewings.
The second was. Indeed we negotiated access for a further week to make the move less stressful.
If the economics work, then do it.
The first of these was not an advantage: they did want to do viewings.
The second was. Indeed we negotiated access for a further week to make the move less stressful.
Funk said:
- no strangers traipsing round doing viewings
- as mentioned get to stay where I am until the new place is ready and don't waste money on renting somewhere
So this is Persimmon actually buying your current home? The developer I am currently dealing with has what they call an 'easy mover' scheme which gets two valuations from local agents and places your current house on the market (provided you agree to the valuation). At that point you can reserve the new home for a very small amount and once your existing house is sold the developer pays the agents fees. Sounds like the Persimmon scheme is a stage beyond that but I guess it depends on how much below market they are offering for this convenience.
I did this with Persimmon end of last year.
I was in my new house within 40 days!
They even gave me a permit to occupy the old house for 5 days during moving, which made moving much easier.
They offered me £210K px value which was a very good offer.
They instantly put it for sale for £215K, reduced it to £210K. And it is still for sale 9 months later!!
Due to the PX there was no negotiations on the new house.
But it worked out very well for me.
I was in my new house within 40 days!
They even gave me a permit to occupy the old house for 5 days during moving, which made moving much easier.
They offered me £210K px value which was a very good offer.
They instantly put it for sale for £215K, reduced it to £210K. And it is still for sale 9 months later!!
Due to the PX there was no negotiations on the new house.
But it worked out very well for me.
Thanks for the comments so far - seems like it could be a good thing if it makes the whole transition easier.
Persimmon do offer a 'Home Change' which looks like it's an assisted sale (presumably leveraging their scale and advertising etc) as well as the part-exchange option. It hadn't occurred to me that the p/x route might mean it goes on the market immediately anyway - that removes a large part of the 'pro' side if that's the case and I may as well handle that myself, that being the case.
Like a car p/x, I'd assumed I'd just 'keep using it' until I complete on the new place and we effectively swap keys on the day; they'd then market mine empty with no chain. Definitely something to check when I go to see the development on the weekend.
Re. p/x value; of course I wouldn't expect full market rate (Persimmon will have costs involved in selling it on etc) but it needs to be close enough to make the deal work for me overall as well as the convenience factor. Perhaps it's helpful that it's a good-sized 1-bed flat I'm selling and there always seems to be a reasonable demand for those locally; the valuation I had for the remortgage last year was £230-235k. It's also appealing in that I have a share of the freehold that will transfer with the property, the lease is 989 years and nil ground rent so I'm bringing a decent/appealing property to the table.
Persimmon do offer a 'Home Change' which looks like it's an assisted sale (presumably leveraging their scale and advertising etc) as well as the part-exchange option. It hadn't occurred to me that the p/x route might mean it goes on the market immediately anyway - that removes a large part of the 'pro' side if that's the case and I may as well handle that myself, that being the case.
Like a car p/x, I'd assumed I'd just 'keep using it' until I complete on the new place and we effectively swap keys on the day; they'd then market mine empty with no chain. Definitely something to check when I go to see the development on the weekend.
Re. p/x value; of course I wouldn't expect full market rate (Persimmon will have costs involved in selling it on etc) but it needs to be close enough to make the deal work for me overall as well as the convenience factor. Perhaps it's helpful that it's a good-sized 1-bed flat I'm selling and there always seems to be a reasonable demand for those locally; the valuation I had for the remortgage last year was £230-235k. It's also appealing in that I have a share of the freehold that will transfer with the property, the lease is 989 years and nil ground rent so I'm bringing a decent/appealing property to the table.
V8 Stang said:
I did this with Persimmon end of last year.
I was in my new house within 40 days!
They even gave me a permit to occupy the old house for 5 days during moving, which made moving much easier.
They offered me £210K px value which was a very good offer.
They instantly put it for sale for £215K, reduced it to £210K. And it is still for sale 9 months later!!
Due to the PX there was no negotiations on the new house.
But it worked out very well for me.
Just seen you posted this before I'd replied with the above...Glad it worked out well! If you'd be willing, would you drop me a line through my profile so I could ask a few questions and get your advice?I was in my new house within 40 days!
They even gave me a permit to occupy the old house for 5 days during moving, which made moving much easier.
They offered me £210K px value which was a very good offer.
They instantly put it for sale for £215K, reduced it to £210K. And it is still for sale 9 months later!!
Due to the PX there was no negotiations on the new house.
But it worked out very well for me.
Edited by Funk on Thursday 10th July 21:34
I did it on my flat in 2021
It was valued at 145k, David Wilson gave me £140k for it and no EA fees, with them the flat went on the open market until the roof of the new house was on, no buyer so they became the buyer, we exchanged and I stayed in it until move in day.
The house I was buying had to be 30% more, (it was 257k) (based on the price of mine)
Recently was going to do it again, David Wilson again, they had changed their rules so the new house only had to be 20% more (so my house was worth £300k and the new one £367k)
Also went to Redrow, the way they do it is so stupid, they work on 30% based on the price of the house you’re buying, the place we looked at was £400k, so £120k between the price of mine and theirs, so they would only offer £260k. No wonder no one takes them up on it!
I would do it again
It was valued at 145k, David Wilson gave me £140k for it and no EA fees, with them the flat went on the open market until the roof of the new house was on, no buyer so they became the buyer, we exchanged and I stayed in it until move in day.
The house I was buying had to be 30% more, (it was 257k) (based on the price of mine)
Recently was going to do it again, David Wilson again, they had changed their rules so the new house only had to be 20% more (so my house was worth £300k and the new one £367k)
Also went to Redrow, the way they do it is so stupid, they work on 30% based on the price of the house you’re buying, the place we looked at was £400k, so £120k between the price of mine and theirs, so they would only offer £260k. No wonder no one takes them up on it!
I would do it again
Maybe an outlier.. but I bought my 1920 built house from Cala homes,
Previous owner had Px'd with Cala... they must have been desperate to shift the last plot on the site as I paid £45k under what Cala had purchased it for 6 months previously (no negotiations after my offer was finally accepted)
Previous owner had Px'd with Cala... they must have been desperate to shift the last plot on the site as I paid £45k under what Cala had purchased it for 6 months previously (no negotiations after my offer was finally accepted)
Drawweight said:
Next door did. They got what they considered market value for it.
Builders put it up for sale and it sold within a week for just about what they paid for it.
I think it s just to get the sale of the new build rather than lowballing the owner and making a profit.
Its completely this. They've got enough of their own houses to sell. Builders put it up for sale and it sold within a week for just about what they paid for it.
I think it s just to get the sale of the new build rather than lowballing the owner and making a profit.
John D. said:
Drawweight said:
Next door did. They got what they considered market value for it.
Builders put it up for sale and it sold within a week for just about what they paid for it.
I think it s just to get the sale of the new build rather than lowballing the owner and making a profit.
Its completely this. They've got enough of their own houses to sell. Builders put it up for sale and it sold within a week for just about what they paid for it.
I think it s just to get the sale of the new build rather than lowballing the owner and making a profit.
Funk said:
Persimmon are building a new development near me which - contrary to my previous disparaging comments about new-build estates - actually looks nice and doesn't appear to be the typical 'cookie-cutter, pushed-to-the-very-edges-of-the-plot' designs. I'm going to have a look at the weekend.
One of the things they can do is part-ex which, as far as I can see, would actually save a lot of hassle and cost... AIUI, typically with a new-build you'd need to have your existing place sold and be ready to go as soon as they come back and say "Your house is built.." which would mean renting between the sale of the current place and moving into the new one which is a huge waste of money.
I'm guessing that they'll be very keen to shift a new home (with whatever margin they have in it) so it's not in their interests to offer too far below market rate - and I would benefit from
Just trying to go in with eyes open and somewhat informed...!
I partex'd a house with a small builder from whom we were buying 1 of 2 houses.One of the things they can do is part-ex which, as far as I can see, would actually save a lot of hassle and cost... AIUI, typically with a new-build you'd need to have your existing place sold and be ready to go as soon as they come back and say "Your house is built.." which would mean renting between the sale of the current place and moving into the new one which is a huge waste of money.
I'm guessing that they'll be very keen to shift a new home (with whatever margin they have in it) so it's not in their interests to offer too far below market rate - and I would benefit from
- an easy sale
- no agents to deal with
- no agents' fees
- no strangers traipsing round doing viewings
- no getting caught in a chain/chain collapsing
- as mentioned get to stay where I am until the new place is ready and don't waste money on renting somewhere
Just trying to go in with eyes open and somewhat informed...!
We agreed the deal but had it written in the contract that should we manage to sell ourselves quicker than the planned exchange with him we would then get a percentage of the sale price above the one "agreed" which would also apply should he also sell it at any time prior to completion ,with a slight buffer in price upwards to apply first.
In the end this was exactly what happened.
As regards Persimmon , my youngest has just exchanged contracts on a small new build with them which bank of M&D are providing 60% of the purchase price.
I negotiated circa 5% off which was money off the house plus then an allowance for upgrades and customisations.
I'm not saying the upgrade prices were necessarily the cheapest but it allowed him to get exactly what he wanted.
Did this in 2022 with Crest Nicholson. Or at least started it...!
We'd already had our house valued by two agents and knew what it was worth before they had their own agents round to value it. Possibly buoyed by a very active market at the time, their offer to us was about £5k less than the higher of the two suggestions we'd already had and felt reasonable/fair for a hassle-free move.
As part of the negotiation we also agreed for a number of free upgrades (carpet, kitchen style/worksurfaces, turf, extended tiling to bathrooms... Basically we asked for all the possible upgrade options they did and then asked them to pay for all of them). The vibe we got was that they will never discount the sale price, but will throw all manner of incentives at you instead. This essentially stops anyone buying later on while they're still building from seeing your discount price via Rightmove etc, so no one can see what else you got and ask for the same!
They started viewings instantly and although our move wasn't contingent on them finding a buyer, they found one very quickly who had offered significantly above their asking price. From memory they were offering us £345,000 and this new buyer was paying £375,000.
This prompted a further conversation and we agreed to pay their penalty fee for pulling out of the part-ex (1.6% from memory, so not even that high) in order to sell directly to the buyer they'd found which put an extra £24k in our pocket. This added a chain risk but to compensate for that we also negotiated that they'd pay £10k of our stamp duty. So we moved with £35k more available than expected.
Edit to add Two years on ex and I split up, sold it, and moved on. He bought a new-build from Cala and we obviously had a chain this time. They chased fairly often for updates on the chain, but were fine about waiting 7ish months to exchange as the chain sorted itself out. As long as they can see progression/conversations happening they'll hold on, it seems.
We'd already had our house valued by two agents and knew what it was worth before they had their own agents round to value it. Possibly buoyed by a very active market at the time, their offer to us was about £5k less than the higher of the two suggestions we'd already had and felt reasonable/fair for a hassle-free move.
As part of the negotiation we also agreed for a number of free upgrades (carpet, kitchen style/worksurfaces, turf, extended tiling to bathrooms... Basically we asked for all the possible upgrade options they did and then asked them to pay for all of them). The vibe we got was that they will never discount the sale price, but will throw all manner of incentives at you instead. This essentially stops anyone buying later on while they're still building from seeing your discount price via Rightmove etc, so no one can see what else you got and ask for the same!
They started viewings instantly and although our move wasn't contingent on them finding a buyer, they found one very quickly who had offered significantly above their asking price. From memory they were offering us £345,000 and this new buyer was paying £375,000.
This prompted a further conversation and we agreed to pay their penalty fee for pulling out of the part-ex (1.6% from memory, so not even that high) in order to sell directly to the buyer they'd found which put an extra £24k in our pocket. This added a chain risk but to compensate for that we also negotiated that they'd pay £10k of our stamp duty. So we moved with £35k more available than expected.
Edit to add Two years on ex and I split up, sold it, and moved on. He bought a new-build from Cala and we obviously had a chain this time. They chased fairly often for updates on the chain, but were fine about waiting 7ish months to exchange as the chain sorted itself out. As long as they can see progression/conversations happening they'll hold on, it seems.
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