Part exchange and assisted move services are being increasingly used by housebuilders to help facilitate sales of new homes. PHPD chats to Neil Knight, Business Development Director at Spicerhaart Part Exchange and Assisted Move about the options available.
What is a Part-Exchange and Assisted Move service?
Part-Exchange and Assisted Move is a fully managed service that enables housebuilders and developers to sell new-build properties more quickly and easily.
At Spicerhaart Part-Exchange and Assisted Move we offer four main services – developer’s in-house part-exchange, funded part-exchange, Spicerhaart assisted move, and multiple-agency assisted move.
There are important differences between the four options but the aim remains the same: to make things as easy as possible both for housebuilders and for potential buyers with existing properties to sell. We work closely with housebuilders to ensure a seamless process and we pride ourselves on the speed of handling enquiries and providing valuations and offers.
In-house part-exchange is a relatively straightforward proposition: we provide the developer with a valuation of their customer’s existing home which forms the basis of an offer to the customer. Once this offer is accepted, the customer is able to go ahead with the purchase of their new home. Our team ensures the sale of the existing home happens as quickly as possible, with a target time of 28 days to exchange contracts, enabling the customer to complete the purchase of the new home.
The funded part-exchange service is an innovative solution for developers who do not run their own scheme. We work with a number of specialist cash-rich buyers, ensuring that we are always in a position to facilitate the purchase of any property, at any value, anywhere in the country – even those with structural or other problems.
We arrange two independent estate agent valuations on the existing property, employing specialist agency selection software to ensure they are market leaders in their areas. We combine these valuations with our own research and analysis to provide a summary report to the developer.
Once the report is received, we will facilitate a cash offer to purchase within two working days. The developers can then put this offer to their customer, along with any additional incentives they wish to make available. Subject to a satisfactory RICS survey, we again aim to facilitate completion of the purchase within 28 days.
What are the benefits to a housebuilder?
There are numerous benefits for the housebuilder in using a part-exchange or assisted move service. Firstly, there’s the fast transaction times – exchange of contracts usually takes place within 28 days –and of course it removes the sales chain enabling both parties to proceed with confidence. Funded part-exchange brings additional benefits in that it removes the need to tie up capital and enables housebuilders to widen the appeal of their developments – especially important in a tight market.
There are also benefits to customers, of course, not least the certainty that their existing property will be sold and the removal of a lot of stress from the process.
What is the difference between a Part-Exchange service and Assisted Move?
With part-exchange, the builder of the new home offers their potential customer a price for their current property, and once that is accepted, the customer can then put in an offer on the new build, safe in the knowledge their current home is sold.
Assisted move is an incentive used for potential purchasers of new build homes, who need to sell their existing home to fund, or part-fund, their next purchase, but who do not meet the criteria for part-exchange. Essentially, it is an expedited sale process, with our team keeping both customer and developer informed of progress. The assisted move proposition appeals to many customers because it removes a lot of the stress of selling their home, and estate agency fees are typically paid by the developer on completion.
With Spicerhaart assisted move, we will instruct agents from our own family of estate agency businesses, but under a multi-agency assisted move we can also work with other leading agencies to ensure that we can always get a quick sale and get the best price for the property.
You have recently reported that your sales are up 46% in the last six months. Why do you think there is a growing demand for these services?
We have had our most successful year to date, and I think there are several reasons, but a fall in listings is certainly one factor. The property market has been tough for some time now, and this makes some people wary of selling. So for those people who are looking to move there are fewer existing homes on the market and new-build becomes an even more attractive option – leaving aside the benefits that a home designed and constructed to modern specifications can have over older properties.
Where movers also need to sell their existing property, they will be faced with the same tough conditions for vendors, so they may want to take advantage of part-exchange or assisted move to give them the peace of mind that their property will be sold, and to bring the cash from that sale ‘on stream’ to finance their new home.
Of course, developers are also keen to sell plots – and helping their customers to raise the money is part of that. As a result, demand for part-exchange and assisted move is at an all-time high.
Could housebuilders of any size use this service, or do you need to be building a certain number of houses a year?
Our part-exchange and assisted move services are available to housebuilders of any size, and many smaller developers come to us as they are far less likely to have the resources to be able to offer a part-exchange or assisted move service in-house. At the same time we also work with some of the biggest names in the industry so our projects range from developments consisting of just a couple of properties to those with thousands of new homes. There’s no such thing as a typical project for us: every client is unique and we aim to tailor our service to their needs.