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What is a property chain and how do I break it?

Property chains can be an added complication, in the run up to buying and on moving day – so what can you do about it?

What is a property chain and how do I break it?

The linking of transactions into so-called ‘property chains’ can be problematic because the chain will progress at the same rate as the slowest link, and if one sale goes wrong it can have a knock-on impact for the rest. Luckily, there are things you can do to manage or even avoid them.

What is a property chain?

Put simply, a property chain is a group of properties where all the sales depend on each other, in a chain-like fashion.

It’s a list of buyers and sellers, connected together because each person is buying a property from someone else in the chain and selling to another in the chain. The chain begins with someone who is only buying and ends with someone who is only selling.

What does chain free mean?

Chain free, or ‘no chain’, means the vendor doesn’t need to buy another house at the same time as they’re selling their old one, and the purchaser isn’t relying on the sale of their old house in order to be able to complete the sale on their new one.

Houses can be chain free for a number of reasons, including:
 
  • The vendor already has a new home to move to
  • The buyers are first time buyers
  • The vendor is selling a second home or an inherited house, so does not need a new house
  • The home is being sold by a company, for example after repossession

What are the risks associated with property chains?

The thing with property chains is that there can be many links, and each link is a vendor who has an estate agent, legal firm, surveyor and mortgage lender. As such there’s ample opportunity for things to go wrong, and, because of the dependent nature of property chains, it sometimes doesn’t take much for them to collapse.

Chains can collapse for all sorts of reasons, including:
 
  • Someone changes their mind about a purchase or sale
  • Someone has a change of circumstance, for example losing their job, splitting with a partner or even falling ill
  • A buyer fails to get the mortgage amount they need
  • A legal firm takes too long with the paperwork
  • A survey reveals problems with a property

How to break a property chain

There are many ways to avoid being in a property chain:
 
  • If you have multiple offers for your property choose a chain-free buyer, for example a first time buyer.
  • Consider having a short-term accommodation option to bridge the gap between selling your old home and buying your new one, therefore meaning the transactions aren’t dependant on each other. You could move in with friends or family, or rent a place of your own. Bear in mind however that it could be a while before you find a home to buy, although being chain-free certainly means sellers will look upon you more favourably.
  • Look for properties with no upward chain, for example a new build. ‘No upward chain’ means the vendor is not looking to buy another property, even if you’re part of a chain.
  • You might be able to get the vendor to agree to a date by which they have to move out, whether they’ve finalised their purchase or not. This is risky for the vendors, especially if they do not have back-up accommodation, so they’re more likely to agree to it if the property has been on the market for a while and they don’t want to risk the deal falling through.

How to keep a property chain moving

A lot of time, being part of a property chain is unavoidable. But fear not – there are things you can do to keep the process flowing smoothly.
 
  • Avoid moving in busy times – reallymoving and the HomeOwners Alliance have found that August is the busiest month to move in. Whilst August is popular for a reason and it may be the best time for you to move, it’s best to avoid it if you can.
  • Plan ahead so you’re ready to move out – pack well in advance so you’re ready to go as soon as your removals firm arrive. Check out our packing guide for advice on how to pack efficiently.
  • Make sure there are clauses in all your buying and selling contracts stating the dates of exchange, surveys and completion.
  • Sign and return all paperwork promptly. Deliver them by hand, courier or special delivery, so you know they’ve got where they need to go.
  • Ensure your estate agent and conveyancing solicitor are experienced and good at what they do. Here at reallymoving we make all the reviews for our conveyancing solicitors publicly available, so you can see for yourself their experience and history.
  • Keep in regular touch with your representatives, so you always know if there’s something you should be doing.
  • Have your finances in place well in advance, especially your deposit. If you’re a cash buyer you eliminate any potential problems with online money transfer.
  • Be organised with your paperwork – keep a file with all correspondence and notes from phone calls, copies of all your service provider’s contact details, and copies of any important documents that are likely to be requested. You could keep them electronically, for example on a USB drive or on Dropbox or OneDrive, but make sure you have a phone, laptop or tablet to hand!
  • Make sure you’re always contactable (within reason!), especially in the run up to and on completion day. If you’ve forgotten to sign something, it doesn’t have to delay the chain if your representative can get hold of you quickly.
As risky as they may feel, the majority of property sales are not chain-free, so don’t worry if you can’t avoid them. Just do what you can to keep the chain flowing, and you’ll complete your move in no time.
 

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