What is a property chain, and how do I break it?

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If you’ve been thinking about buying a property that’s in a property chain, or you’re currently stuck in a chain, read on to find out what a property chain is and how you can break it.

What is a property chain?

First things first, let’s clarify what a property chain is and how it works.

A property chain consists of multiple buyers and sellers who are all connected and dependent on the next person to complete their sale. So, for example, if you’re interested in buying a property that the seller is currently occupying, and you have to wait until the seller buys their next property, you’re in a property chain.

Property chains can include several buyers and sellers. The longer the chain, the more complicated it can become, especially if the buyer needs to secure a bank loan to complete the buying process.

What is an example of a property chain?

To put things into perspective, let’s say, Arthur, who’s currently renting and is a first-time buyer, has found his dream flat. His finances are in place and his offer has been accepted by Sally. However, Sally (the current owner of Arthur’s dream apartment) has also found her next home, but has had to wait until she found a buyer for her flat. Now that Sally has found her buyer, she can get her finances in order, which will then allow her to place an offer on her next home.

Here’s what a chain could look like. Note that in this diagram, the Smiths are also searching for a new home, meaning that the chain could keep going until someone breaks it by either moving into rented accommodation or buying without having to sell their property first.

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What happens when a property chain collapses?

The longer the chain, the greater the likelihood that it could collapse. There could be various reason why this may happen, some may include:

  • A seller doesn’t find the right buyer
  • A sale falls through
  • Changes in a buyer’s financial situation, e.g. the lender withdraws their loan offer
  • Paperwork completion and processing may take longer than expected, causing hold-ups
  • Other unforeseen circumstances arise, such as a seller decides to take their property off the market

When one part of the chain collapses, it often means that the rest of completions will take longer too. However, don’t let this put you off, as many buyers and sellers successfully complete their property sale on a property chain every year.

Can I speed up my property chain?

There is no sure-fire way to speed up completions on a property chain, however, by ensuring you swiftly complete and return your paperwork and ensure that your finances are in place, you can help keep the property chain moving. Good communication and regular contact with all those who are involved can also help keep the momentum up.

How do I break a property chain?

Buying a property that’s in a chain may slow down your purchase or your sale. So, how can you avoid a property chain altogether? Here are three options that can break a chain:

  • Consider renting your next property, before buying
  • Find a chain-free seller or chain-free buyer (someone who isn’t reliant on waiting for another sale to go through)
  • Choose a property that’s already vacant
  • Choose to buy a newly built property
  • Buying a new home is a fairly straightforward way of breaking a chain as, once the building is completed, you’re free to move in.

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How long does it take until completion when in a chain?

There’s no easy answer to this question, as it is all dependent on the types of buyers and how many transactions need to take place. If you want to sell your property faster, a property auction and the Modern Method of Auction may be a great choice if looking for a fast sale.

Property chains can be tricky, but with thousands of chain sales completed every year and with the right estate agent, who can guide you through the entire process from start to finish, you can be sure they will keep the process moving and get your sale completed.

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