Is there a weak link in your property chain?
A property chain occurs when buyers and sellers are linked together because their purchase or sale is dependant on another transaction further down the chain. Often these chains can have dozens of parties connected. It’s difficult to assess the average property chain length; it can vary from three to ten or more!
If only one person forgets to do something, be refused their mortgage or pull out because they’ve changed their mind for the whole chain to be delayed or collapse.
When you’ve spent months getting to the point of completion, this can be devastating news. It can also be costly, on average the loss to a vendor, (incremental legal fees, utility bills, mortgage payments, etc.) is just under £3,000. And of course that’s not taking into account the cost to your health – you can understand why moving house cited as the number one stress in the UK.
The top 10 reasons for a collapse in a property chain:
- Mortgage funds refused
- Survey throws up a problem
- Buyer changes their mind
- The seller can’t find another property
- Buyer reduces their offer last minute
- The seller receives a better offer
- Seller changes their mind
- Buyer or seller illness or death
- Seller divorce or separation
- Conveyancing delay
What can you do to stop your property chain breaking?
There isn’t a lot you can do if there is a problem somewhere along the chain, but you can minimise any issues by making sure sellers, buyers, estate agents and solicitors dealing with the legal process, are all up to date and in touch with each other.
- Get a good solicitor or conveyancer who will chase your buyers or sellers solicitors to ensure nothing is outstanding at every stage of the process.
- Make sure your mortgage offer, if required, is ready promptly as securing mortgage finance and the offer is a critical part of the process.
- Ensure the Estate Agent is aware of all the participants in the property chain, to chase up.
- Check any survey issues quickly on any house you are buying or on your own home, if a buyer is purchasing it.
- Check with your mortgage Company if there are any retentions from mortgage offers, and ask buyers to do the same.
In 2018 just under 40% of property sales fell through, which equals over 300,000 transactions a year! One-third of those failed sales were attributed to the buyers failing to get their finance approved, with 69% due to the buyer pulling out.
Some more FAQ for Property Chains
What does chain free mean when buying a property?
Chain free when buying another property means that your purchase is not dependant on anyone else selling or buying a house which is the same as no chain.
How can I avoid a property chain?
If any part of the chain breaks, then make sure the estate agent remarkets the property quickly, possibly at a reduced price to find another buyer and minimise delays. If the break is your purchase or sale, then likewise, move quickly to find another property or find another buyer.
Flying Homes encounter such scenarios daily, approximately 30% of our property purchases are from broken property chains.