Moving house can be an extremely stressful and expensive process. You’ll need to spend big on solicitors to make sure everything is legally binding. You’ll need to suffer the uncertainty that comes between making an offer and completing on a sale. Then there’s the process of moving itself.
Fortunately, you can circumvent (or at least limit) many of these hassles by buying your new house in a slightly different way. This is where home exchange comes in.
What is home exchange?
If you’ve ever part-exchanged a vehicle, then you’ll understand the core concepts behind home exchange. Here, you’ll sell your existing property directly to a company, which will sell a new-build property directly to you.
How does it work?
The home exchange process unfolds over several distinct steps. You’ll first look through a selection of new homes, and decide whether you’d like to buy one. The home exchange developer will then let you know whether they’d like to buy your house, and at what price. In most cases, the developer will get two valuations from different agents. The price they arrive at will be non-negotiable, and subject to a survey of your home.
You can then instruct a conveyancing solicitor to assess the new property, and pay any up-front reservation fees the developer might ask for.
You can then sell up and move in as soon as the new home is built.
The benefits of home exchange and the disadvantages
This is a way of doing things that departs considerably from the traditional one. There are notable advantages and drawbacks.
You’ll be able to avoid the open market, and you won’t need to bother with the estate agent fees. There’s also none of the uncertainty associated with a long chain of buyers and sellers. Since you’re buying from a large entity that owns and sells many properties, the risk of a sale falling through is diluted substantially, and the process tends to run much more quickly than it would have on the open market.
In other words, this is a practice that’s well-suited to people with limited time available, who want minimal hassle.
So, what are the downsides?
Firstly, there’s no guarantee that the company will want to buy your home. For part-exhange to work, the company will often impose a maximum that they’ll pay for your existing home. They want to make a profit, after all, and they’re not property traders. So, this isn’t right for those looking to downsize.
You’ll also have a much more limited range of options than if you’d decided to buy a house on the open market, instead. Only new-build houses tend to be available, and there is a chance of depreciation once you’ve moved in.