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A Guide to Property Chains

Property chains can be difficult to understand, especially if you are a first-time buyer and new to the housing world. Here at Fast Sale Homes, we aim to answer your questions clearly, such as “what is a property chain?”, or “what to do when a property chain breaks?”

Table of contents:

What is a property chain?

What is a chain free property?

Why is a chain-free property advantageous?

What is the average property chain length?

What happens when the property chain collapses?

Ways a property chain can be fixed

What is a property chain?

Put simply, a property chain is a collection of property transactions linked together – they all rely on the sale of every home in the chain. The people at the beginning of the chain are buyers with nothing to sell, whilst those at the end of the chain have nothing to buy. The people in the middle consist of people who are selling to one person and buying from another.

However, please note that the buying process is different in Scotland – you can read more here.

 

An example of a property chain in action:

Kate is a first-time buyer with nothing to sell. She is buying a studio flat from…

Louise, who is purchasing a larger flat from…

Alexa and James, who are moving to a house with a garden being sold by…

Bridget and Michael, who are buying a bungalow from…

Peter who is retiring to his holiday home in Spain.

This means you are reliant on other homeowners in the property chain to sell their houses. For example, if you are not a cash buyer, you are dependent on your current house being sold before purchasing a new home. If your home fails to sell, you are stuck in a chain and delay moving into a new home.

It can also be the other way around too, by having 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 to move into too.

What is a chain free property?

This means that the person selling the property to you is not dependent on buying another house in order for your sale to go through. It may also be that the property they have lined up has no upward chain, or they are moving into rented accommodation.

Chain free properties are extremely attractive and should only be between a select few people – you, the vendor, the lender and both parties’ solicitors. The fewer people involved and the shorter the time-scales, the more likely it is that everything will happen successfully.

Why is a chain-free property advantageous?

Chain-free means that no one is relying on someone else from buying or selling a house. It is simply without a chain of people linked together and dependent on others who are buying or selling a house.

So, if a buyer decides to pull out of a house sale at the last minute, it will not affect you as there won’t be a property chain collapse. This is why it is often said getting a first-time buyer or someone who has already sold their home (a cash buyer), to purchase your home is advantageous. Doing this means that you will be able to sell your house quickly and for a good price.

Photo credit: eamesBot / Shutterstock 

What is the average property chain length?

There is not one answer that fits all. The average property chain length is hard to calculate because each scenario is different. How long it takes is entirely dependent on the property chain you are in – there have been instances where a single property chain has had a length of up to eight buyers/sellers.

However, the length of a property chain doesn’t always mean they take longer to reach the end, as some chains may be resolved seamlessly. Although, it is worth noting that this a rare occurrence, and you shouldn’t expect this to happen.

Finding out what the average time to sell a house might give you more of a clear idea about the average property chain length.

RELATED: The Best Time to Sell a House Quickly

What happens when the property chain collapses?

There are several reasons why property chains collapse. Some of the most common reasons include:

  • One of the buyer or sellers decides they don’t want to proceed
  • One of the buyers has problems securing a mortgage
  • A property survey reveals unknown problems and the buyer does proceed
  • One of the legal firms may be slow in processing or requesting information
  • A buyer or seller tries to renegotiate the terms of the transaction
  • There are unforeseen events, like sickness

If you are struggling to sell your home, there may be a number of reasons why. Here are 13 reasons why your home isn’t selling and how you can fix it.

Ways a property chain can be fixed

If your property chain falls through, this isn’t the end of the world. There are a number of ways this can be resolved, keeping the chain moving forward. You can consider any of the following options:

  • Renting a home or staying with family/friends
  • Lowering your asking price
  • Purchasing a new-build property – these properties rarely have an upward chain, which means that the seller is not reliant on anyone above them
  • Sell to a first-time buyer, or cash buyer
  • Sell your home to Fast Sale Homes and we will give you cash for your home, with the aim to exchange contracts within 5 to 7 days

Feature image credit: Africa Studio / Shutterstock

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