How to keep a property chain together and what to do if it breaks
Most property sales happen in a chain. Find out how to make your chain stronger, complete your move faster, and what to do next if the chain breaks.
What is a property chain?
A property chain is a sequence of three or more interdependent property transactions; each person in the chain is dependent on all other buyers and sellers for their property transaction to go through.
At one end of the chain is someone who is buying only (such as a first-time buyer) and at the other end, someone who is selling and not buying. All other parties in the chain will be both buying and selling.
A chain could be as long as 10 links or more. Technically there is no upper limit.
Transactions can only move at the pace of the slowest link in the chain.
Each person in the chain will have their own solicitor, estate agent and, mortgage lender. Some will have surveyors, managing agents, mortgage brokers, co-purchasers and so on.
Coordinating a lengthy chain so that all complete sales and purchases complete at the same time is invariably difficult.
The longer a chain is, the greater the likelihood of one of the links breaking.
Why might a chain break?
This can happen for multiple reasons, and at any stage in the process. A chain may collapse due to:
- A buyer pulling out of their sale following a bad property survey
- A sale falling through if a buyer is unable to get a mortgage
- One of the parties losing their job, falling ill or splitting up with a partner
- Gazumping: a vendor taking a higher offer at the last minute
- Gazundering: a buyer dropping their offer at the last minute, which could cause the seller to pull out
Ways to prevent the chain from breaking
Solicitors and estate agents should work hard towards making the process as efficient as possible – they are incentivised after all.
However, you can also help things along in various ways:
- Choose a proactive and communicative solicitor and estate agent.
- Chase your solicitor and the estate agent for regular updates
- Arrange your mortgage as early as possible. Make sure you have your deposit ready to pay to the seller when required
- Collate key documents so they are on hand when needed
- Respond quickly to any request for information
Can a broken chain be fixed?
Possibly, though it will depend on the reasons for the collapse.
- If the seller pulls out, be proactive in finding another property before your sale falls through. Communicate what is going on with your buyer.
- If your buyer pulls out, do your best to find out why. If the reasons are financial, would you consider taking a lower offer?
- If your buyer is dragging their feet following exchanging contracts and the chain is at risk, you can give them a ten-day deadline by sending a ‘notice to complete’. They will doubtless want to comply rather than risk losing their deposit.
How to avoid long chains
A situation where both the buyer and the seller are chain-free is unusual, but you may at least be able to avoid getting into a long chain:
- If you are selling and have multiple offers, choose a chain free buyer if possible. If the buyer is buying without a mortgage – better still.
- Consider selling before you buy. If you can move in with relatives or can afford to rent for a while, you may have a lower offer accepted on a property as you will be chain-free.
- As a buyer, look for a chain-free property. Properties that are second homes, new builds or where the owner has died are more likely to be chain free.
- If your seller has not found anywhere to buy and you are in a chain that is getting impatient, you could ask the seller to consider moving into rented accommodation.
Your next step
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