Everything you need to know about a property chain

Property sales and property purchases are one of the most stressful experiences a person will live through. With so much going on, and so many new terms to learn, it can be easy to feel out of your depth, especially when it comes to dealing with property chains.

A property chain occurs when buyers and sellers are all reliant on the sale of their homes in order to purchase their next one. If you are a first-time buyer, or a buyer who is living in rented accommodation and has no other property to sell, you will be the beginning of the chain. If you only need to sell, then you will be at the end of your chain. If you are buying and selling, you will find yourself in the middle link in the chain.

In this article we will be looking at how property chains work, how you can help keep your chain intact, and how you can sell even if your property chain breaks!

How do property chains work?

A typical property chain looks like this:

• First-time buyer - The start of the chain, the first-time buyer does not need to sell in order to buy a new property.

• Homeowner - The homeowner is selling their home to a first-time buyer and purchasing their new property from the retiree.

• Retiree - Selling their home to the homeowner and moving in with their own family.

What does chain-free mean?

If a property is advertised as chain free, it means that you will be able to move into it as soon as the purchase is complete. This is a very attractive quality for buyers as it means that the chances of the sale falling through are less than a property in a chain.

Whilst the chances of the sale falling through are lessened,  there is still no guarantee that the sale will go ahead. Survey results come back during the conveyancing stage can reveal issues with the property or the seller may simply change their mind. 

Whilst a chain-free property sale brings with it the added security of the sale being less likely to fall through, the downside to this is as the seller is not reliant on the sale, they are less likely to accept a lower offer.

Whilst a chain-free property sale brings with it the added security of the sale being less likely to fall through, the downside to this is as the seller is not reliant on the sale, they are less likely to accept a lower offer.

What does no upward chain mean?

If a property is advertised as having no onward chain, it means that the seller is not reliant on the sale of their current property in order to purchase their next one. This is often the case when the property is:

• Rented accommodation

• Inherited

• A second home

• Being sold as the seller is moving in with a partner

Can a property chain collapse?

Yes, they can! Property chains can collapse, as until the contracts are exchanged, the sale is not legally binding. Property chains break for a variety of reasons, but some of the most common reasons your chain may collapse include:

• Your seller changes their mind

• The surveyor reveals poor survey results

• A house seller may have difficulty securing a mortgage for their next property

• Gazumping

• Gazundering

• Personal circumstances such as a bereavement or a divorce

What happens if chain collapses after exchange?

If you are part of a broken property chain that has collapsed after the exchange, it is important not to panic. Whilst it is far from ideal, you will still be able to save your sale. As we have previously mentioned, if the buyer pulls out before the exchange of contracts, then no laws have been broken. But if they pull out after the exchange, then they are liable for damages. You would be able to take the buyer to court and gain compensation to put towards a new house.

You could also talk with your estate agent and find out the reasons for your buyer pulling out. It may be a case of the buyer feeling the home needs improvements or other small fixes that can save your sale and get your sale back on track.

If your buyer is pulling out last minute because they can no longer afford the property or because they are trying to gazunder you, you could offer to lower the price or open negotiations if you really want to save the sale. Or you could sell to a cash buyer, who will be able to buy your property in a time scale that suits you and get your sale back on track.

What can I do if my chain collapses?

If your chain collapses, it is important to remain calm. Whilst it can feel like the end of the world, you still have options. As we have mentioned above, should your seller pull out after the exchange of contracts, you can take them to court as they are in breach of their contract, but if they pull out before the exchange of contracts, it can leave you feeling panicked and trapped.

The first thing you should do is get in touch with your estate agent. If your seller is pulling out due to poor survey results, or because they believe the property is no longer worth what they were originally going to pay, your estate agent will be able to give you the reasons why, help you find a solution, and maybe even open the lines to negotiation.

If your buyer is set on pulling out of the deal and you are dependent on the sale to go through in order to purchase your next property, then a cash-buying company could be the way forward. Cash buyers will purchase your property for a cash sum, in a time frame that suits you, allowing you to purchase the home of your dreams, without being caught up in the chain collapse.

You could also look at taking out a bridging loan in order to help you afford your current home as well as your new home. However, whilst these can help bridge the gap between the two houses, they are often very expensive.

How can I keep a house chain intact?

Stopping a property chain from collapsing is not always possible, however, there are steps you can take that will help you to keep your chain intact and reduce the risk of your sale falling through:

• Choosing a buyer who is not part of a property chain

• Buying a new-build property

• Ensuring your mortgage offer is watertight and there have been no mistakes on the mortgage application

• Buying a property that is part of a short, upward chain or is chain-free

• Having the savings readily available to cover related costs such as stamp duty and solicitors fees

• Sell your property first and rent a property whilst you look for your next home

Can I speed up my property chain?

Whilst there are no guaranteed ways to speed up your property chain, there are steps you can take to help keep things on track and to move your sale along as quickly as possible. Simple things like being proactive in your sale can make a world of difference. Some of the best ways you can do this is by:

• Agreeing on a date for exchange and completion and aiming to stick to it

• Keeping a record of what's happening in the sale 

• Keeping the contact details of your estate agent, conveyancer, and other relevant parties to hand

• Signing and return any documentation as soon as you get them

• Getting your deposit ready early so that when exchange day comes around you are prepared

• Keeping relevant documentation to hand

Looking to escape the property chain?

Looking to sell your house so you can become a chain-free buyer? Or maybe your property chain has collapsed? Whatever your reasons are for selling, at The Property Buying Company, we are here to help.

As a genuine cash buyer, we can buy your property in a time scale that suits you! Whether you are selling in 3 months to become a chain-free buyer or as little as 7 days because of a chain break, we can buy your house as soon as you are ready to sell.

We are also proud members of the National Association of Property Buyers and The Property Ombudsman, as well as being rated excellent on Trustpilot.

We only require one quick viewing in order to confirm our initial cash offer is correct. After you have accepted our offer, that is the amount you will have in FULL in your bank.

With over 50 years of combined experience, we will buy any house, in any location, in any condition, taking the stress out of house sales. Plus, we cover all fees for you - even the legal ones!

Looking to escape the property chain? Then give us a call today or fill in our online valuation form to receive a no-obligation CASH offer which we could have in your bank in as little as 7 days...