As a first-time buyer, once you’ve had your offer accepted, you’ll be eager to move forward as quickly as possible – but if you’re in a chain how does this affect things and how can it impact the timeline of your property transaction?
So what is a chain, in home moving terms? Essentially a property chain begins with someone that is buying a property, often a first-time buyer, and ends with someone who’s selling. The number of ‘links’, buyers and sellers in between, will vary for each chain. You’re in a chain if you are buying from someone who is relying on the sale of their home to fund the purchase of their next property.
A property chain can make the purchase of your new home more complicated depending on the number of links – the more links there are the higher the risk of things going wrong and the chain collapsing. Even if you’ve not got any buyers or sellers below you, the onward chain could still mean you feel the impact of the chain.
Here at Enact, we’ll explain how being in a chain could affect your property purchase and the ways you could move home chain-free.
Ways to buy a property chain-free
If you don’t want the complications that can come with buying a property in a chain, you may be wondering how you could move chain-free. Some examples include:
- If you already own a property you might want to consider selling your existing home and moving into rented accommodation on a short-term basis. This will mean you are chain-free before taking the next step on the housing ladder.
- If you can find a seller who is also not in a chain i.e. their sale isn’t conditional on the purchase of another property then essentially you’re chain-free
- A first-time buyer buying from a new-build developer
- Buying a vacant or repossessed property
- Part-exchanging your current property to a developer
Why might a property chain break?
Unfortunately, with any property transaction, regardless of whether you’re in a chain or not, there is the element of risk that it could fall through. Some of the more common reasons a chain will break are:
- A buyer can’t get a mortgage
- A seller has a change of heart and takes their property off the market, having already agreed to the sale
- One of the buyers pulls out after a property survey shows costly or dangerous problems
- The conveyancing takes too long causing a buyer/seller to walk away from their transaction
It can be very frustrating if this happens and costly as, while your conveyancer may not charge you a fee, there are still third-party costs including disbursements and surveys which could cost several hundreds of pounds.
If you have Home Buyers’ Protection insurance, depending on the terms and conditions, you could claim back some of the money you’ve lost in fees if your house sale falls through.
Things you can do to help keep your chain moving
If you do happen to find yourself in a property chain, there are some steps you can take to help mitigate the risks of it collapsing.
In a property chain, the timeline to completion will only move as quickly as the slowest person in the chain. It is therefore important that you are not the person holding things up. Make sure you respond to any paperwork as quickly as possible and keep in regular contact with your conveyancer, estate agent and mortgage broker (if using one).
If you come across as proactive and keen it’ll show your seller/and buyer that you’re committed to the purchase and sale which should help keep the chain together. It’ll also become harder for a person to withdraw if a good rapport has been established.
Have your house in order
While communication is key it’s also equally important to be organised. Making sure you’ve got everything in place from the get-go will help keep your transaction running smoothly and reduce the risk of things going wrong.
- If you’re selling your home have a licensed conveyancer lined up as soon as you put your property on the market – there’s a few checks and important paperwork that can be completed before you even accept an offer on your property, which could save time once you do have a buyer
- As a buyer, you can do your research on which conveyancer you want to act on your behalf as soon as you start house hunting. It’ll then mean as soon as your offer is accepted you can instruct them to get started right away.
- Consider using a mortgage broker – they can advise and source the best mortgage product for you based on your affordability once you’ve had an offer accepted. They should be able to manage a lot of the paperwork on your behalf and will make sure your mortgage offer goes through as quickly as possible.
- Make sure you have any necessary paperwork to hand – a number of parties will need to confirm things such as your identity and address as well as a confirmation of your source of funds e.g. for first-time buyers where does your deposit come from? If you’re selling – have any warranties, guarantees etc ready.
If the chain collapses, what can you do?
If your seller has lost out on the property they were buying you may be left unable to progress. Depending on where you are in the chain your option here would either be to wait until they find an alternative property to purchase or, alternatively, you could suggest they move into short term rented accommodation so that the sale can still go through.
This would put them in a strong buying position when it comes to them finding their next property as they aren’t dependent on the sale of their current property anymore.
Whatever happens – do whatever you can to keep your chain moving. Maintain a clear line of communication between your estate agent and conveyancer. Respond to enquiries as quickly and efficiently as possible. Be flexible – if you find yourself in a long chain several parties need to work together to achieve the same end goal.
Here at Enact, we provide the highest quality residential property conveyancing services in the fastest, most efficient, and most innovative way. If you’re looking to move now or soon get a free instant conveyancing quote here.