News
In the loop - February 2008
Secure Home Purchase - the perfect Part-exchange model?
12 February 2008
When movewithus formed property trading company Secure Home Purchase late in 2007, it was with the aim of running the perfect Part-exchange model - quite a bold undertaking. Despite this, movewithus were confident that their years of experience managing the Part-exchange transactions of their corporate clients would hold them in good stead.
Ben Greco, Secure Home Purchase director, said: “We know we have set the bar high with regards to our expectations for Secure Home Purchase. We wanted to provide a complete outsource offering for developers, which is particularly attractive given the current market conditions. Developers should be concentrating all of their resources on their core activities of building and selling quality new homes, not worrying about second hand housing stock.”
But how does the proposition work? What are the components that make this model different?
Ben Greco comments: “The most important factor is achieving accurate initial valuations, since our business model is built around buying in high volumes of property and selling them on quickly. As such, we must get our values right – too high and we lose money, too low and we do no business.”
In terms of reselling Part-exchange, historically, developers tend to concentrate on the price they achieve for a Part-exchange rather than timescales. The Secure Home Purchase proposition sees timescales as equally important.
Ben Greco argues: “If you analyse true holding costs, it is better to achieve rapid re-sales rather than holding on to property in the hope that you can make profits on the underlying asset value. Developers should realise that Part-exchange is merely a by-product of selling a new home, not a way to make money.”
Secure Home Purchase act as the ‘fund’ behind Taylor Wimpey’s easymover secure proposition, guaranteeing to buy a customer’s Part-exchange property if a private sale is not achieved within a certain period of time.
