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A Guide to Property Chains When Buying or Selling

Property Chains - Paper houses in a row

When it comes to buying or selling, property chains can be complex to understand, however, it’s not as complicated as it may seem. To find out what a property chain is and everything you need to know about the dreaded property chain that you may encounter as you buy and sell, continue reading.

What is a property chain?

Put simply, a property chain is when homeowners who wish to sell their houses rely on other homeowners to also sell their houses.

This occurs when homeowners wish to buy a new property and sell their old home at the same time, which is mostly the case for any homeowner, apart from first-time buyers.

For example, in order to afford the house you wish to buy, the vast majority of homeowners are solely dependent on your current property being sold. If your home fails to sell, you are stuck in a chain with very little wiggle-room which can be extremely frustrating and can prevent you from moving into a new home. This is one of the main reasons why people end up having to pull out of a house sale, thus breaking the property chain.

This could also be the other way around, as you may have a buyer ready to buy your current home, but the people you wish to buy a new house from may not have found a house yet or are waiting on their sellers to find new accommodation too – and so on. This is why it is called a chain, as if one person’s chain breaks, it can put the rest of the property chain in jeopardy.

What is the average property chain length?

Property chains can be quite long, and while the average property chain length can be hard to determine, there have been instances where a single property chain has had a length of up to eight buyers and sellers.

The long length of a property chain doesn’t necessarily mean that it can take a long time, as some property chains are resolved easily and conclude with a quick house sale. However, it is worth noting that this is a rare occurrence and if this happens to you, you should count yourself lucky!

Photo credit: Kanjana Kawfang / Shutterstock

Why might a property chain collapse?

You might be wondering why property chains collapse, but there is not one simple answer for this. There are several reasons why a property chain may break, with some of the most common reasons are the following, according to Which?:

  1. A house buyer pulls out last minute – this may be due to falling ill, losing their job or problems with the property are revealed through a survey etc.
  2. A buyer in the chain cannot secure a mortgage.
  3.  ‘Gazumping’ – when a seller accepts an offer but pulls out when offered a better deal by another buyer.
  4. If a buyer lowers their offer in the last minute and the seller does not agree with the change in price, the deal may fall through. This is also known as ‘gazundering’.
  5. If a seller takes their house off the market at the last minute.

Why is a chain free property the ideal solution?

Chain-free means that no one, on either side of the deal, is reliant on anyone else to buy or sell a house. This means that you are not dependent on others who are buying or selling a house at the same time. An example of this type of chain-free process is between a first-time buyer, and a property developer of a new build home.

Photo credit: Billion Photos / Shutterstock

5 ways a property chain can be fixed

If your chain collapses, as much as it may feel like it, it isn’t the end of the world. Here are 5 ways that a property chain can be fixed:

  1. Renting or staying with friends/family – This allows the property chain to continue once you have sold your home, instead of buying and selling simultaneously. This often means you are a cash buyer, which is advantageous to homeowners when selling.
  2. Buying a new-build house – This is an advantageous step to take as new build properties rarely have an ‘upward chain’. A ‘no upward’ chain means that that the seller is not reliant upon anyone above them, meaning that the process is much more straightforward and pain-free. 
  3. Consider lowering your asking price – As much as you may not want to, if you want to sell your house fast, doing this makes buyers more likely to consider purchasing your property, thus fixing the property chain.
  4. Sell to a first-time buyer – If you have the option to, first-time buyers are favourable as they won’t be in a chain of their own, which lessens the chances of them dropping out from the deal.
  5. Sell your home using a fast sale company – here at Fast Sale Today, we buy any house in any condition without any property chains involved. We guarantee a great price and as long as you agree to it, we will give you cash for your home quickly.

Feature image credit: Africa Studio / Shutterstock

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