If you’ve been offered the chance to part-exchange your home, is it likely to be the right move for you and does it typically offer a good deal? We take a look at the pros and cons of part-exchanging properties and the issues you need to be aware of.
What does it mean to part-exchange your property?
Part-exchange means the option to trade in your existing property when you’re buying another one.
The property investor, company or property developer you are buying from will use your property as part-payment for the new property you are buying from them. Rather than having cash, they’ll gain the value of your old home, which they may subsequently sell or let out to make money from.
You can see why this might be an attractive proposition, as it removes the need to sell your old property yourself. But is it the right option to suit your needs?
Pros of part-exchanging your property
There are various benefits involved in choosing to part-exchange your property. Here are some of the key pros to be aware of.
A guaranteed sale
One of the biggest pros of part-exchanging your property is that, once the deal is arranged and you’ve signed on the dotted line, you’ve got a guaranteed sale. This takes away the stress of having to wait around until your property sells and means you can make solid plans for your onward move.
No property chain worries
Another key pro involved in part-exchanging your property is that you can be sure that you won’t get stuck in any property chains. Property chains can be lengthy and stressful, not least as you never know when a crucial link in the chain will crumble. If one person further up the chain suffers a problem, it impacts all the way down to you and could seriously affect the sale of your property.
A quick sale
Once you’ve agreed to part-exchange your property, the process can be a lot quicker than selling your house the traditional way. The sale can be organized quickly and you may even be able to complete the transaction in a matter of weeks.
No estate agent fees
Another bonus of part-exchange is that you won’t have expensive estate agent fees and commission to pay, as they’re out of the picture. This could result in saving you hundreds of pounds.
The cons of part exchanging
Of course, there can be downsides to every scenario, so to keep things in perspective, here’s an insight to some of the cons.
Below market value price
Most properties that are part-exchanged will be bought for slightly below the current market value price. The property will be independently valued, but will be a definite sale price, not an asking price. So if you’ve got a set price in your mind that you’d like to achieve, it may not be the best route for you.
Some homes aren’t suitable for part-exchange
Unfortunately, not all properties are eligible for part-exchange. It may be that your property is located in the wrong part of the country for the investment company you’re interested in using, or that it’s a flat with a very short leasehold that curtails its ability to be sold on.
As you can see, one of the biggest bonuses of going down the part-exchange route is the ability to gain control over your house sale. Although the price you’ll receive will typically be lower than market value, it’s a guaranteed cash price. In times of market uncertainty, when property sales are fluctuating, a definite sale can be a life-saver.
Are you interested in exploring a part-exchange process? Just enter your postcode in the box on our site and see if your property is applicable for a cash offer today.
Unlike large new home developers, who mostly restrict part-exchanges to those who are upsizing, Molae Properties will consider every situation, whether you are upsizing or downsizing your property.