When multiple buyers and sellers are linked to and dependent upon one another for the completion of their home purchase, this is referred to as a property chain. The link in the chain is often a first-time buyer who is buying but not selling, and it finishes with a vendor who is selling but not buying, like a retiree moving in with relatives. The individuals in the middle who must both sell and acquire property are the “links” in the chain.
Will a property chain delay the purchase of a home?
Moving homes can take longer and be more difficult if you’re part of a large property chain. Each property in a chain typically has an estate agency, law company, surveyor, and mortgage lender associated to it in addition to the vendor. Therefore if you are looking for property for sale in Bicester any one chain might easily contain dozens of participants. The entire chain can be delayed if one link forgets to sign a document, doesn’t hear a phone message, or takes any other action that slows down the completion of a purchase. If a buyer or seller has trouble getting a mortgage or changes their mind and withdraws, the chain could also completely break.
The chain will only go forward at the rate of the slowest link; the challenging part is identifying who that is at any given time and motivating them to move forward. Every year, hundreds of thousands of people go via property chains, despite the fact that they can be tedious and include some risk of a failed home purchase. Hence, if you’re in one, it’s not the end of the world.
How to stay out of a bind?
You can prevent being in a chain, or at least a long one, with the appropriate planning and research: Pick a buyer without a chain. Choose a buyer who isn’t part of a chain themselves, such as a first-time buyer, if you’re selling and there are several offers on the table.
Take into account leaving Consider selling your home and relocating into short-term rented housing, or with relatives or friends, if you’re having trouble getting an offer approved on a property because you’re in a chain while other purchasers aren’t. After that, you won’t have a chain connecting you to the seller, which you might use to your advantage when making an offer. There is no assurance that you will find a new place to buy, so this is a dangerous tactic.
Search for a vendor without a chain. If you’re buying and can afford to be picky, seek for houses where the upward chain is short or, even better, non-existent, such as when the previous owner has passed away and the property is empty or when the sellers owned it as a second home and don’t need to find another somewhere to live.
Look at newly constructed homes; they do not have upward chains for obvious reasons. The developer can offer a part exchange, which means they’ll acquire your previous property to expedite the process, if you have a property to sell. Selling your house this manner does not necessarily result in the best price, though.
Set a date. Whether they have purchased a new home themselves or not, if you need to move quickly, attempt to persuade the vendor whose property you are purchasing to agree to a date by which they are ready to go. Sometimes vendors will agree to relocate into rented housing rather than take the chance of the purchase falling through.
Why real estate chains can fail?
Several factors can cause a home sale to fall through, but the chain is typically the main obstacle. A seller may withdraw if the process is taking too long, and a buyer may be forced to do so if their own transaction falls through.
A chain can also break for the following reasons:
A buyer cannot obtain a mortgage loan to match the offer they made.
A legal company takes too long to process the paperwork or follow up with clients.
A buyer or seller changes their minds.
A buyer or seller becomes ill, loses their job, or separates from their spouse.
An inspection exposes issues with a property.
It’s important to address any of these possibilities if you believe they could apply to you before making an offer on a house or putting your own on the market. In order to ensure that none of these situations will likely occur to the buyers of your property if you’re selling it, ask your estate agent to thoroughly investigate them.
How to maintain a house chain?
Theoretically, it should be the experts’ responsibility to maintain communication and make sure the proper actions are being taken. Before choosing to work with an estate agency, find out if they have specialist sales-progression teams, as certain estate companies are exceptional at moving things along in this way.
Yet, some people struggle with process management, so you might need to step in to keep things on track. Inquire with your conveyancer and estate agent about your ability to track down individuals holding up the process. Keep in mind that etiquette and friendliness go a long way in these situations if you do contact other parties directly. Ask who will call them and when they can update you if you are unable to reach the other links in the chain yourself. Along with encouraging others, you can aid by answering inquiries and finishing chores quickly.
Make certain to:
Hire a property solicitor and an experienced estate agent – inquire about their employment history and current workload. Ask your elected officials if there is anything you or they should be doing on a regular basis. Get your funds in order as soon as possible, especially cash for your exchange deposit. Save everything in a file, including copies of your correspondence and call logs. In case you need to call your service providers immediately, have copies of their contact information both at work and at home. Keep duplicates of any documents on hand that might be required. Immediately sign and return all of your documentation. Send documents by courier, hand delivery, or special delivery. Include language in your purchase and sale agreements specifying the exchange, survey, and completion deadlines.