If a property developer contacts you about buying your house or you have reached out to them yourself, the transaction will usually work in a couple of ways by either a conventional sale or a part exchange. There are certain benefits in each approach, although this will depend on your individual needs.
Conventional sale:
This is usually a straightforward, simple transaction between you and the developer, where they pay you a set amount in exchange for the ownership of your house. You can then use the proceeds from the sale to help you with the purchase of your next home, but without the intention of buying from the developer that you sold to.
Part exchange:
This is when you intend to purchase a home from the property developer. The developer will part exchange your existing house and then discount the price of the property from the house that you are intending to buy from them. This option is favoured by many homeowners as it ensures the sale of their current property and speeds up their ability to buy a new home.
Advantages of selling your house to a developer
Many homeowners sell their properties to developers each year due to the advantaged they get from the sale. There could be many reasons as to why you would want a quick sale and selling to a developer could be the perfect solution for you. Here are some examples on why selling to a developer has its advantages.
- If your home suffers from issues like dry rot, subsidence, vandalism or any other problems, most private buyers would see these flaws and it would be enough for them to no longer be interested in buying as they may not be willing to spend time and money on fixing the issues. Developers on the other hand, have access to lots of resources, like cheaper materials and are more likely to make an offer.
- Selling to a developer would usually mean you don’t have to worry about house viewings as it would usually be a representative of the developer who would carry out an inspection. A lot of homeowners dread the process of house viewings due to the time they can take up and can often feel intrusive letting random people look around your home.
- If you have a sale chain, then you would have to wait on the sale of your existing house in order to obtain the proceeds to complete the purchase of your new home. If a sale falls through, the entire chain will collapse, and you’ll have start the process again and try finding another buyer. When you sell to a developer, it’s a straightforward transaction that avoids you being caught in a sale chain.
Disadvantages of selling your house to a developer
Just as there are several advantages of selling to a developer, there are also a few drawbacks which are useful to know about before coming to a decision.
- Some developers may try to convince you that your home is worth less than a price some private buyers could be willing to pay and will try to encourage you to accept a lower sale price. They may also be particularly aggressive about trying to convince you to sell. You could receive countless emails and phone calls asking whether you’ve decided on selling to the developer which can feel very stressful for many homeowners.
- It may be harder to find a property developer willing to sell a house that is derelict, because they can take a much longer time to renovate to a point where they can be resold at a profit.
- A developer could keep you waiting to complete their end of the process for buying your house. During this period, you could be asked to sign a “lock out” contract that would give the developer the sole legal authority to buy your property and prevents anyone else from buying.
