Many people are still unaware you can part exchange your home

What You Need to Know

1. Property part exchange allows would-be home buyers to trade in their old home part exchange for a new property.
2. The scheme can provide an easier alternative to traditional methods for those seeking a quick move or unable to sell their home.
3. The part exchange method cuts out certain expenses such as estate agent's fee making it cost effective for some buyers.
4. Estate agents will typically offer a rate of 5-10% less than the market value of a property to prospective buyers.
5. Eligibility for the scheme is based on the property having no structural damage and the exchanged property not being valued at more than 70% of the new property.

What is it?

Part exchanging your home is often overlooked as an option but the concept is a proven one and, if your circumstances and eligibility are suitable, often a good prospect. If you’re anxious to move, or your house simply isn’t selling, it could well be worth considering part exchange homes. The idea is that a new housing development will allow some home buyers to trade in their existing home as part payment towards a new one.

The process removes any of the need for a property chain and the difficulties and delays that process provides and as such it also considerably speeds up the transaction process and removes the various estate agent fees.

Typically the deal will involve exchanging your property for 5 - 10 per cent less than the market value. This is obviously a distinct downside, although if the circumstances are good then it is a downside outweighed by the advantages.

Why?

In these dark days of financial turmoil moving home is a costly and challenging business. Stamp duty, capital gains tax, survey costs and an uncertain property market all mean that a lot of people are choosing to stay put. Some are choosing to adopt unusual strategies, such as buying as a collective, or else in desperation find they are getting very bad rates on mortgages. Some are renting in the hope that this awful recession will blow over and doing major maneuvers with one’s property will be a bit less hair-raising. Some people are choosing (‘choosing’ here is used euphemistically) to live with their parents, in a Charlie Bucket-style in-bed-with-grandpa-and-grandpa scenario. Dark days indeed.

Eligibility

Eligibility criteria as to whether you can part exchange your home are generally based on the property having no structural issues and the value of the exchanged property being no more than 70% of the value of the new-build property.

If you’ve heard of a new housing development that you’d like to move into the first step is to contact your estate agent to discover if the property is eligible for the scheme. They will arrange for your current property to be valued and after this process you will typically be made an offer along the lines of 90 – 95 per cent of the market value. You will then be expected to appoint a property solicitor and apply for a mortgage. Then following a survey on our property and the exchange of contracts you will trundle off to live in a sparkling new home.

Part exchanging your home is not for everybody but if it transpires that you stand to gain more than the 5 – 10 per cent of your value then it could be the way to go.