What is a property chain? It’s a line of buyers and sellers linked together.
At one end of the chain is someone who is only buying, not selling; at the other end is a vendor who is only selling but not buying. The chain’s links are the people in between who need to both sell and buy a property.
Whether you’re looking to sell an existing property or buy a new one, chances are that you’ll become part of a property chain.
On top of which, each property in a chain will also usually have an estate agent, legal firm, surveyor and mortgage lender attached to it. So, there could easily be dozens of people involved in any one chain, and they all depend on each other to make the chain process work smoothly.
If just one person in the chain does something to slow the progress of a purchase, the whole chain could be delayed. It could even cause sales to fall through.
So, what can you do to help manage the chain?
Begin by making sure your finances are in order. A recent study found that one in ten property chains collapse due to the buyer not being able to secure the funding required in the closing stages of the acquisition. This means not having the money at hand to issue a deposit, or an inability to commit to the full purchase of the home through either a mainstream or alternative lender.
Without the necessary finance at hand, there’s a real risk of losing out on prospective opportunities due to the time it can take to get finance approved.
Luckily, there are various alternative finance products that can be tailored to a buyer’s individual needs. For example, a bridging loan can offer existing homeowners short-term finance when there is gap between the sale of their property and completion of the new one.
Gather as much information as you can about your chain.
Build a good relationship with the seller and their agent – they’ll both be able to offer information on the number of people and properties involved in the chain (as well as pointing out any potential weak links).
When possible, try your best to find out:
- How many other properties are involved in the chain?
- What’s the status of all parties? Have they all found somewhere to buy?
- What are the proposed times for moving?
- Do they need a mortgage? If so, has borrowing been approved?
- Are there any obvious issues to prevent sale progression?
Having a strong relationship with all parties involved (including your solicitor) will help you gather vital information on their position and circumstances. A good estate agent will check each link in the chain on a weekly or fortnightly basis.
Sometimes you may need to gather the information yourself to stay updated with progress.
Other actions to help keep your chain moving.
- Ensure your agent is proactive in their approach.
- Get a bridging loan to help complete the purchase.
- Keep copies of all your documents to hand in case you need them.
- Be prompt with your responses.
- Hand deliver or send documents via registered post to ensure they arrive on time.
- Agree dates with your agent and solicitor, and ensure you stick to them.
If a deal in the chain falls through, it doesn’t necessarily mean the end to buying your property. Likewise, if someone’s slow or unresponsive, it may be worth considering your options. Are you in a position to impose a deadline to get a response? Could an alternative buyer be found for the problem property?
To avoid all of that, look for chain-free opportunities.
Someone who is chain free doesn’t need to sell their property in order to buy another one. Essentially, they’re only buying, which means you can complete quickly.
First time buyers who haven’t owned a home before can be more attractive to sellers, as it can guarantee a quicker sale that doesn’t rely on multiple parties being involved. A chain free property could also refer to a seller who is only selling, and doesn’t need to purchase another after. Or, it could be a new build home.
Alternatively, Louis Taylor’s expert residential team will help to ensure your sale goes as smoothly as possible with expert advice and support at every step of the journey. If you’re looking to sell your home, get in touch on residential@louis-taylor.co.uk or call on 01782 622 677.
Craig Biddulph, Residential Sales Manager
T: 01782 622677
M: 07753 891593
E: craig.biddulph@louis-taylor.co.uk