Residential Property Exchange Mechanisms

Overview of Assisted Home Sales

A sales mechanism where a property developer or housebuilder facilitates the sale of a potential buyer's existing home to enable the purchase of a new construction. The builder effectively becomes involved in a chain to expedite the purchasing process.

Property Valuation and Eligibility Criteria

The housebuilder will usually arrange for independent valuations of the existing property. Eligibility commonly depends on the property's age, condition, location, and marketability. Typically, new-build homes are priced higher than properties being considered for this mechanism. Acceptance is not guaranteed.

Purchase Agreement & Negotiation

A binding agreement is established regarding the price offered for the existing home. The offered price is usually lower than the open market value to account for resale risk and associated costs incurred by the home builder.

Timeline & Legal Processes

A detailed timeline is created that outlines the processes from valuation to the completion of the new home purchase. All standard legal processes for property purchase and sale are followed, including conveyancing.

Benefits and Considerations

• Benefits: Streamlines the buying process, removes chain-related uncertainty, potentially quicker move-in date for the new home.
• Considerations: The price offered is commonly below market value, limitations on property types that qualify, potential for limited negotiation on the offered price.

Alternative Assisted Sales Schemes

Discussion of other forms of assisted sales such as "move maker" or "assisted move" schemes, and comparison to the above. Emphasis is given to the specific risks/benefits associated with each alternative, e.g. a potentially higher selling price, but with no guarantee of a sale.