Part Exchange with a New Build

Mabel McLean
February 17, 2024
Part Exchange with a New Build

Part Exchange with a New Build


Part exchanging your new home seems relatively straightforward.  For the most part it is.  The builder you’re buying from agrees a fair market value for your home, if you agree, then a deal is done.  The builder buys your home and theamount you agreed is taken off the purchase price meaning you only need to pay the remainder through a mortgage or cash.


Do remember that you cannot part exchange your home for less than what you are buying.  For example, if your home is worth £200k and that is agreed, you then cannot purchase at £150k.  There has to be a minimum 30% gap between your house value and the purchase price, where the purchase price is the greater figure.  


Part exchange is used for a variety of reasons, the main ones being;

·     You don’t want the hassle of selling and being part of a chain of buyers/sellers as this could mean your date of entry is delayed.  If one buyer/seller pulls out of the chain it could mean no sale for you.

·     You’ve tried to sell and aren’t getting anywhere. As long as builder offers part exchange and your property is acceptable, then it’s a guaranteed sale.

·     It’s easy and straightforward; you know what you’ll get for your existing property and know that you will move on the date agreed.


How does Part Exchange work?


There is a Simple Part Exchange where a valuer and estate agent, chosen by the builder you’re buying from, will view your property and agree on what your home is worth.  This is the home report value.  

The builder will not always pay the home report value.  At this point you can negotiate till both parties are satisfied.  If you’re not happy with what’s offered, you can still opt to put your property on the open market yourself and see how it goes.

Once an amount is mutually agreed, no matter what amount, it will not impact on any incentives which the builder may offer.  In one of our previous blogs, we talked about the various new build incentives but wedidn’t touch on part exchange.

Now there is a complicated version of part exchange where a builder may offer 105%.  It’s normally the home report value plus 5% of that.  

Eg.  Home report value is£100k, and builder offers £105k

In this version of part exchange that 5% will be counted towards the overall cash incentives the builder may offer.  Remember the 5% allowed incentives is based on the purchase price of the new property.

Eg.  Purchase price is£300k, making the 5% allowance £15k.  If you agreed part exchange figure of £105k based on £100k home value, then you have already used £5k of the £15k.  


Cash incentives can range from;

1.    Assisted deposit

2.    Mortgage paid for up to a year/6 months

3.    105% part exchange

4.    LBTT paid

5.    Legal fees paid


Non-cash incentives are where no money is exchanged but white goods are offered, flooring, landscaping etc.

With 105% part exchange you are being offered more but it’s subject to your property being deemed suitable by the builder.  It does mean that you have more to put towards the purchase price of your next home.

Another version of Part Exchange is where builder says “we will help you sell your house, if we can’t sell within 6 weeks of date of entry then we will buy”.  You and the builder will have agreed a selling price at the start of the process.

The builder will pay the estate agent fees and proactively market it.  The estate agent is chosen by the builder.   When on the open market, your property could fetch above home report value, it could also fetch less.  In this scenario, you could decline any offer which is below what the builder and you have already agreed on.  

So you have three possible ways to Part Exchange your home ifyou’re buying with a new build.  If this has confused you, and I’m sorry about that, then get in touch with Team MFS to talk through your options.

Better yet, Scotia Homes and Team MFS have two Part Exchangeevents coming up. Cameron, our Director, will be at two of Scotia Homes’ siteto chat about Part Exchange, mortgages, his motorbike

·     Saturday 17th February; Willowburn in Tarves

·     Saturday 24th February; Hazelwood in Blairgowrie

The events will run from 12pm to 3pm, a Sales Advisor from Scotia will also be on hand to discuss any particular plots you’re interested in.Cameron will be available to chat to anyone that day, that’s when he’s not having his cuppa with a fine piece.


Should Tarves and Blairgowrie not be your locations of choice,check out Scotia Homes’ other developments.


Save the date!

For our mortgage advice services, we will charge a fee of between £0 and £495. This will be based on the complexity, level of work involved and the referral source. The fee is payable on application.

At time of publishing, Friday 16thFebruary 2024, all information was accurate.





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