Buying and selling a property at the same time can be tricky. After all, for most homeowners, any success with the former is contingent on their success with the latter.
It stands to reason then that property chains are fairly common. When buyers and sellers are buying and selling their respective properties at the same time, this can lead to a property chain, which can lead to frustrating delays to your move.
So, what exactly is a property chain? In this guide, find out how property chains work with tips on how to speed up a property chain.
What is a property chain?
A property chain is a bit like a relay race, where properties are the batons being passed from one owner to the next, all working together to reach the finish line. Some sprints may be slower than others, which can hold up things somewhat.
However, with teamwork, coordination, and a bit of help from a motivated estate agent, you can keep the chain moving smoothly.
How does a property chain work
Property chains involve various players and adding extra layers of complexity to the home-buying and selling process. Here's a step by step guide to how a property chain typically unfolds:
Step 1: Getting started
It all begins when a homeowner decides it's time to move. They put their current place on the market for sale, while actively looking for somewhere else to call home.
Step 2: Offer and agreement
When a prospective buyer steps in and makes an offer on the seller's property, and the seller gives a nod of approval, they enter the "subject to contract" stage. This means they've shaken hands on the deal, but it's not yet legally set in stone.
Step 3: The search begins
Now that our former seller has transformed into a buyer, they start their search for a new place to call their own. This kickstarts a fresh property transaction, keeping the wheel spinning.
Step 4: The chain takes shape
If the seller's plan to buy a new property relies on selling their current one, that's when a property chain forms. Think of it like a Rube Goldberg machine, with each movement hinging on the success of the previous.
Step 5: Conveyancing and building surveys
Every property transaction involves legal legwork to ensure everything is on the up-and-up. This includes things like conveyancing and property surveys. Any issues with these can disrupt the whole chain.
Step 6: It's a wrap
When everyone in the chain is ready to exchange, the property chain is complete.
How long does it take to buy a house in a property chain?
There are lots of things that can affect the speed of your property chain. The motivation of the buyers and sellers in the chain, the efficiency of their conveyancers and agents are just some of the things that can lead to delays.
Can you speed up a property chain?
With multiple parties involved, there’s no sure-fire way to speed up a property chain. That said, there are things you can do to speed up your side of the transaction:
Keep in regular contact with your estate agent, conveyancing solicitor and mortgage advisor to check that they have everything they need to progress your sale.
Choose the right buyer
Your buyer’s situation will play a huge part in the length of your property chain. If you’re lucky enough to receive multiple offers on your home, don’t just be swayed by the value of the offers; consider your buyer’s position. Afterall, the benefits that come from selling to a first time buyer may outweigh all other considerations.
Consider a new build
Moving into a new build means there’s no upward chain, putting you in a great position to speed up your respective property chain.
Rethink your move
Consider a short-term arrangement such as a rental property or staying with friends or family. If the sale of your home isn’t dependent on your purchase, your chain will become shorter, which may speed things up for everyone involved.
Consider alternative financing
If the sale of your home is holding up your chain, you may want to think about other financing options. A bridging loan can be used to fund your new property until a buyer is found.
Speak to our mortgage advisors about a bridging loan
Perhaps the most important thing to remember is to keep a cool head. Delays can happen but they won’t necessarily lead to you losing your buyer.
What happens if a property chain collapses
Unfortunately property chains do collapse from time to time. Generally speaking, the longer the chain, the more likely it is to break. All it takes is one person deciding to hit the brakes on their sale. In some cases, this domino effect can bring the entire chain to a grinding halt.
Here are the main causes for property chain collapses, with tips on how to fix them:
Change of heart
Sometimes, someone involved in the chain just has a change of heart. This can’t be helped - after all, moving home is very emotional.
How to fix this: Unfortunately, in England and Wales at least, there’s nothing to prevent them from walking away from a sale. That said, whether you’re buying or selling, it’s important to keep things moving along as quickly as possible so any delays or difficulties don’t pre-empt this change of heart.
One way you can do this is to keep on top of your admin. Make sure you have all relevant documents to hand as soon as possible and keep in regular contact with your agent, mortgage provider and solicitor to assure them you’re moving things forward.
Surprises from the survey
Property surveys are worth their weight in gold but that isn’t to say it isn’t frustrating when your surveyor finds something that is potentially costly to resolve.
How to fix this: Sadly, this is something that would be too difficult and expensive to fix elsewhere in the chain. If something arises in the survey, it is up to the buyer to decide whether they continue with the sale, negotiate a price reduction with the seller, or walk away entirely.
Mortgage offer is refused or withdrawn
If someone in the chain encounters obstacles securing their home loan, it can send ripples through the entire chain.
How to fix this: Recruiting a mortgage broker to look after your mortgage application can save you a lot of hassle in the long run. They’ll not only be able to arrange your mortgage agreement in principle, but stay with it until your mortgage is finalised, in case there are any issues along the way.
Hold-ups with conveyancing
Legal paperwork can sometimes drag, particularly when it comes to something as complicated as homebuying. If a solicitor or legal firm takes too long processing documents, it’s frustrating for everyone involved and may even lead to members of the chain pulling out of their sale.
How to fix this: Coordination and communication are key to keeping everyone moving forward smoothly. If your conveyancer identifies a potential hold up, you should alert your estate agent immediately. They’ll be able to advise you on what to do next.
Related: What is conveyancing?
What is a no upward chain property?
No upward chain simply means a seller isn't in the market for another property themselves, so their buyer won’t have to wait for them to find a new place to live before they can complete the sale. This should - in theory - make the process much simpler for everyone involved.
What is a chain-free property?
When a seller is not reliant on their sale to complete the transaction, theirs is known as a chain-free property. This can be a huge draw for buyers as they can lead to a faster and more straightforward buying process.
What we can do to help
Wherever you are in a property chain, CJ Hole can help. When you work with us, our dedicated sales progressors will keep things moving along nicely, keeping you up-to-date every step of the way. Contact us to find out more.