Why is the topic of part exchange homes so compelling in the current housing market?

Firstly one needs to understand what is meant by part exchange homes. Put simply it is an exchange of one home against the purchase of another, normally brand new but not exclusively so.

As the name implies there is only a proportion of the overall property deal financial transaction that can be exchanged and the top up to the complete deal price normally comes by way of a mortgage or cash.

Now it is often assumed that you can only trade upward in price using this type of new homes sales incentive but there are instances where the part-exchanged property can be of a higher value than the new one for which it is being exchanged.

I have known examples where retirement property developers such as McCarthy & Stone have part exchanged one of their brand new retirement homes for an older property.

This does not happen too frequently as unless there is an adjustment made as to when the actual residual balance is paid to the new home customer then the house builder will suffer a negative cash flow.

The solution to that problem is overcome by the housing developer deferring part of the payment for the customer’s house until they manage to sell on the bought in property via an estate agent or their own on site house sales team.

Are Part Exchange Homes A Good Deal?

This will always depend on your own individual situation. If you are desperately trying to sell your current home because for example you need more room to accommodate a growing family but are unable to do so because of the difficult housing market then a PX can be an ideal way of solving the problem.

The developer will almost always make you an offer for your own home but the amount of the offer will always be dependent on the condition of your property and the housing market that is local to you.

The deal will also depend on how desperate the developer is wanting to sell their property. If the builder is carrying a lot of year end stock and wishes to liquidate those assets by the end of their financial year then you could find yourself on the end of a very good deal indeed.

Part Exchange Homes An Interesting Twist

A developer is extremely unlikely to sell an unfinished house or work in progress to you unless they are achieving a massive premium on the current market value and they can sell your house quickly.

There is also a positive spin off from the part exchange homes deal, and that is even if you are not in the market for a brand new home then if you contact the housing developers in your locality they may well have a list of pre-owned homes that they would be willing to sell you.
Naturally with the good mortgage contacts that the developers have they could probably sort out a very good mortgage deal for you into the bargain.

Overall part exchange homes are a very good marketing incentive for the house-builder and can also be a very good solution to your own housing problem.

I would suggest that you contact a home builder in your area to see what they have on offer on a part exchange homes deal as this will be subject to local variations.

Depending on your individual circumstances part exchange homes can be a very good deal.