Author Topic: Part Exchange  (Read 6448 times)

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lindy-lou

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Part Exchange
« on: September 26, 2011, 08:10:43 pm »
Hi, we are thinking of part exchanging our home for a new house. We have found a builder who is willing to take our old house...but at £30,000 below the home report value, following negotiations they have also agreed to pay £ 10,000 towards stamp duty-Which is £23,700- and pay legal fees. There are various problems with the house not least that it overlooks a block of flats and the garden has no privacy, as the house is much higher than the flats. My husband called them today to offer £40,000 below the asking price!! They seemed very insulted and refused this, my husband then asked for our deposit to be refunded which they will do, the point is my husband thinks they will call us back with a counter offer somewhere in the middle which we would probably accept, im not sure and think they wont make another offer.
Does anyone have any views on this please ??
PS there will be 60 houses on the estate and they have only built about 30 so far....in 4 years!!! This seems to indicate to me that they are having trouble selling them
Any opinions and views welcome......

thanks

Lindy-Lou


Philofacts

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Re: Part Exchange
« Reply #1 on: September 27, 2011, 10:40:10 am »
Part-exchanging has both advantages and disadvantages as you have discovered.
The £30,000 below valuation offered by your builder does seem a bit excessive.  However, this is not a good market and as you say the builder is only selling around 7 new homes on this development a year.

Whether a lower offer is accepted will depend on the house builder. A large national builder will take an offer if it is near their End of Year Figures. A smaller builder may be compelled by their bank to accept a lower price as they will need cash flow to pay down their debt.

The price you are paying £594,500, is in the high Stamp Duty 4% rate. You have negotiated this down to 2.3% from 4%, which is good, especially as it is just inside the 4% £500,000 band.
Stamp Duty Calculator

If you have Exchanged Contracts  your 10% deposit is non-refundable.  However, I presume you mean your reservation fee. Again they have agreed to refund this so you can walk away cost free if you choose.

Now the real consideration is that you don't like the house, it has various problems and is overlooked with no privacy.  Considering your budget, you must be able to find a better home. In addition you will need to consider that you have the potential of living on a building site for another four years at least.

Finally, you need to consider that you have doubts about this home so any future buyers may have the same doubts.  Even given the current market, these houses have been slow to sell so you could also have difficulty selling in the future.

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