Part exchange (PX) is a popular solution for sellers who need to quickly sell their current property so they can move into a new home — all while avoiding many of the issues that come with a conventional sale. But how does part exchange work when buying a new house?
If you have ever sold a property or are in the process of selling, you’ll know how complex and often stressful the experience can be. Fortunately, there are alternatives for sellers who are struggling to sell their house or need the money for their current property before they can purchase a new one. If you’re a developer or builder with clients who need to sell their property to fund new development, you should consider a part exchange scheme (PX).
In this post, we’ll not only answer the question, “how does part exchange work when buying a new house?”, but we’ll also highlight the benefits of part exchange compared to selling traditionally.
What Is a Part Exchange Sale?
A part-exchange scheme — sometimes referred to as “PX” — is where a property serves as part payment for a new house. The critical difference is that homeowners work with a property developer instead of an estate agent. This method helps sellers avoid the risk of a sale falling through and the need for property chain repairs.
One of the reasons some sellers like and even prefer part-exchange schemes is because the sale of their house is guaranteed. Being stuck in a property chain that’s riddled with delays and complications can be a miserable experience for sellers, and so PX can be a viable solution with zero risks. It’s particularly beneficial and appealing to sellers who need to sell their property as quickly as possible.
How Does Part Exchange Work When Buying a New House?
House part-exchange schemes are similar to an everyday home sale. When you work with us, it’s no different from selling a house on the market, only that HBB Solutions is the buyer. A typical part-exchange scheme works in the following way:
- You, the developer, are informed by your client that they have found a new property and want to part exchange to raise funds.
- Once we’ve had a chat, we send a local estate agent to carry out an independent and fair valuation. We typically request at least two valuations to ensure a fair estimate.
- We will assess the valuation and make an offer (subject to a survey).
- The homeowner will decide if they are happy to accept the offer. If so, they can begin to sort out the mortgage on the new property.
- A conveyancing solicitor will assess the new house.
- Once the assessment is all clear, contracts can be exchanged on the house within as little as a month.
- The client may be required to pay a 10% deposit when contracts are exchanged, of which your solicitor will hold onto a portion.
- As soon as the money is released, both you and the client can conclude the sale.
Part-exchange schemes are fairly straightforward and intended to reduce the amount of stress, paperwork and uncertainty of a regular house sale. Your clients will also appreciate avoiding the risk and additional stress of the property chain falling through.
Who Is Eligible for Part-Exchange Sales?
For sellers to be eligible for a part-exchange scheme, they need to meet the following requirements:
- They are the full owner(s) of the home they wish to sell.
- The property is structurally sound and in good condition.
- The existing property is worth around 65-80% of the new home’s asking price.
- If the property is leasehold, it needs to be a fixed-term with 80 years or more left on the lease.
The location of the property will also be a factor, and uncommon or odd building designs may be rejected.
Why Choose HBB Solutions?
A part exchange-sale can save you time and stress and simplify the property sale process significantly, as long as you have the right people by your side. At HBB Solutions, our team of experienced and knowledgeable property experts specialise in part-exchange, chain repair and guaranteed purchase. If you are a property developer or builder looking to provide your clients with a quick and easy way to sell their property, why not offer a part-exchange scheme to speed things up?
Part-exchange schemes are fantastic for developers or house builders who want to assist their clients with selling their property and moving into a new house. A PX avoids the unwanted delays and expenses that tend to occur with a normal house sale, including expensive agency fees, broken house chains and the risk of a sale falling through.
Additionally, part exchange keeps your customers happy while growing your business and reputation as a developer. If your customers need a quick and hassle-free property sale, a part-exchange scheme could be the ideal solution.
Offering successful house part-exchange schemes can help increase your perceived value as a builder or developer to your existing customers and potential new clients. A part exchange gives you more freedom with the timeframes of your projects and the peace of mind knowing that a quicker sale can help you to meet deadlines.