Stuck in a property chain?
No property chain worries, just a fast house sale!
When it comes to selling a house, few things cause as much stress and anxiety as being stuck in a property chain and unable to move forward with the purchase of your new home.
Unfortunately, ‘property chain’ issues affect a significant number of house sales that fall through before completion. On top of this, even those house sales that do go through successfully, often experience frustrating and unnecessary delays as a result of property chain hold ups.
What is a property chain?
A property chain is basically a succession of linked house purchases.
If you are buying a house, you will often need to sell your current property in order to fund this next purchase. As you sell your home to buy from someone who is also selling their home, a property chain if formed.
Unless you’re selling your home to a first-time buyer and buying your new home from someone who is stepping off the property ladder (maybe moving into rented accommodation), you will most likely be caught up in a property chain.
Ultimately, the longer the chain, the more opportunity there is for somebody to pull out and break the entire chain. Not many Estate agents want to disclose this figure, but 1 in 3 house sale will fall through before completion!
Only 10% of property transactions in the UK are ‘chain free’ or have ‘no forward chain’. If you are lucky enough to be in a chain-free position when selling your house, you’re pretty much guaranteed to have a successful, hassle free sale!
Common problems of being stuck in a property chain
When you’re in a property chain the success of buying your new home will depend on the success of the other property transactions within your chain.
If one ‘link’ breaks, the whole property chain can fall apart which can potentially cost you a fortune in time and money.
There are many different reasons why a house sale might fail to complete, ultimately resulting in a chain break. Here are some the most common reasons:
- Someone in the chain has been refused a mortgage loan
- Someone in the chain feels the house sale is not progressing fast enough and pulls out
- Issues could arise from a structural survey
- Legal issues can arise from local searches; like previous flooding, local planning and environmental issues
- The buyer / seller just changes their mind
- One of the sellers in the chain gets a better offer for their house (known as gazumping)
For those who need to sell their house fast, it is important to minimise the risk of your house sale falling through wherever possible.
The number of buyers in a chain can affect the chance of your house sale completing
Data has proven the more buyers you have in a property chain can drastically increase your chances of a house sale falling through.
The graph above shows the percentage chance of a successful completion when selling a house by the number of buyers in the chain.
When there are three buyers in a property chain (which is not uncommon), only 40% of sales will reach completion. If there are four buyers in the chain, only 14% of house sales will complete, so that’s a huge 86% chance of your house sale not completing!
So, after all the efforts of arranging viewings, going through negotiations and agreeing a sale price, there are still no guarantees that your house sale will end in success.
Can you prevent a property chain from collapsing?
Unfortunately,there is nothing you can do to prevent a property chain collapsing. But there are several steps you can take to make sure as a buyer and a seller, you are in the most proceedable position possible.
As with any house sale, it’s important that you get your ducks in a row from the start. There are lots of things you can do before you even start house hunting and by being super organised from the start, you can save yourself a lot of heartache in the long run.
Things you can do in advance to avoid a house chain collapse
- Get your finances in place – Talk to a mortgage lender honestly about your current financial position. Make sure you ascertain whether you would be approved for a mortgage and get an indication of how much they would be willing to lend you. Ideally you should have a mortgage agreed in principle before you go house hunting.
- If you are selling a house, make sure it is priced fairly for its condition. Also make sure you disclose any and all information you have on the properties condition (good and bad). If you fail to mention something that later comes up in a structural survey, your buyer may try to reduce their offer or even pull out of the sale.
- As a buyer, once your offer has been accepted on your new home, ask for the property to be removed from the open market. Not every estate agent will agree to this, but it will stop any other potential buyers from gazumping you.
What are the risks if your chain breaks down?
Just one person pulling out can cause the entire chain to collapse, bringing emotional distress to the rest of the parties within that chain.
Depending how far along you are with your house sale transaction, a chain break could be financially devastating. You could potentially lose money that you have already paid out for mortgage fees, solicitors and surveys; all of which could run into the thousands of pounds! Worst case scenario, if a chain breaks after contracts have been exchanged but before completion; this can result in entire deposits being lost, which can be life destroying!
Do all house sales come with a property chain?
Fortunately, not all house sales come with a property chain. If you have cash buyer, perhaps an individual who has already sold their property or a cash home buying company, you can avoid a house sale chain.
However your next property you buy, may been part of a chain. Unfortunately, there is nothing you can do to change their situation.
Can you sell a house without entering into a property chain?
In short, yes! It is possible to sell a house without getting stuck in a property chain. To achieve a chain free house sale, your best bet would to either sell your house at auction or sell to a genuine cash home buyer
If you have your heart set on a new home, it’s important to bear in mind that you may have to enter into a chain
Sell your house at auction – no property chain involved
You may wish to sell your house at a property auction to avoid getting caught up in a property chain. Although a property auction would eliminate a house chain, there are no guarantees that a successful house sale would be achieved. Read more about the process of selling a house at auction.
Sell your house to a cash home buyer to avoid entering into a property chain
You could choose to sell your home to a cash home buyer. This method of property sale will prevent you from entering into a house chain and provide you with a quicker house sale then you can achieve anywhere else.
You must make sure that you are using a genuine cash home buyer though! There are hundreds of companies claiming to be legitimate cash buyers and are able to buy your house at 100% market value in 7 days.
The reality is there are only 3 companies in the whole of the UK that directly buy houses for cash.
Quick Move Now are a genuine cash home buyer. We have been established and trading since 1998 and have over £6 million in the bank to directly purchase houses across England and Wales.
Selling your house directly to Quick Move Now offers an excellent alternative to help you break away from a traditional property chain. Because of our large cash reserves, we can even buy your house in as little as 7 days, allowing you to get moving quicker!
If you have already suffered someone pulling out of a house sale and need to sell your house fast, the process is easy with quick move now. When selling your house to Quick Move Now, there are no costs or obligations at any point of the transaction, if you change your mind, you are free to walk away!
Quick Move Now have helped thousands of home sellers who have been caught up in a chain break!
When Annie and Hugh Simmonds found their dream retirement home in Devon, they were distraught when their buyer pulled out at the last minute, breaking the entire chain.
Read Annie and Hugh’s full story here >>
If you concerned about being stuck in a property chain and would like to find out how Quick Move Now can help you move quickly, either complete our online estimate form or call 0800 068 3366 and speak to one of our professional property buyers.
Danny Luke, Managing Director of Quick Move Now explains:
The UK property market is in a very interesting phase at the moment. Property shortages mean that in many areas of the country there is exceptionally high demand for properties but in other areas, houses are sitting on the market for more than 300 days before they successfully secure a buyer.
If you’re living in an area of high demand, you’ll be conscious of the competition you face when trying to secure your next property. Being stuck in a property chain can put you in a disadvantaged position over someone who has already sold their home.
On the flip side; if you’re living in an area where it’s more challenging to sell a property quickly, you may feel you can’t afford to wait for your existing property to sell and fear that if the sale of your existing property fell through, it would take too long to secure anther buyer.
Or, perhaps you are planning to relocate and are getting frustrated by house chain issues affecting your buyer or a hold up further down the property chain.
Either way, a quick, guaranteed cash house sale will free you up to move forward with your next purchase without any of the usual stress or hassles that being part of a property chain bring.