If you are selling your house and buying another, your sale may depend on your buyer selling their house, and your purchase may depend on the person you’re buying from buying their new place.
When you have a number of people buying and selling property like this, where one is depending on the next to keep things moving, it’s called a chain. The chain begins with someone who is only buying a property – the bottom of the chain – and ends with someone who is only selling – the top of the chain.
The chain moves at the pace of the slowest link. If everyone is on top of paperwork and there are no snags with surveys, finance or anything else, it can move fairly steadily. If one person has an issue, however, the whole thing can grind to a halt until it’s resolved.
Does a buyer chain affect the likelihood of selling my home?
If you are selling your home and potential buyers are aware you are in a chain, they might decide not to make an offer purely for that reason – especially if they are also buying and selling. If you can sell to a first-time buyer, then at least you know where the end of the chain lies.
If the worst comes to the worst, you might decide to sell your house and move into rented accommodation for a while. That will strengthen your position as a buyer.
What impact does a chain have on buying a house?
If you are buying from someone in a chain, you might have a long wait or else lose your chosen property due to complications. If you can buy from someone who is not also selling, or you buy a new build from a developer, then at least you have only one person ahead of you.
If other buyers interested in the same properties as you are chain-free, you may be at a disadvantage and struggle to get an offer accepted; being sold subject to contract (SSTC) on your own property is certainly a good position to be in.
What do I do if a chain fails?
A buyer chain can fail for a variety of reasons, although they all boil down to one issue – someone, somewhere in the chain, for whatever reason, does not press ahead with a property purchase. This might be because a survey reveals issues that are a deal-breaker, their mortgage is declined, their personal circumstances change, or they change their mind.
You can take steps to ensure, as far as anyone can, that person isn’t you. You might consider getting a survey done on your own property before putting it on the market so you are aware of and can deal with any issues.
You’ll also need to make sure your deposit is both sufficient and available, and that you have secured an Agreement in Principle (AIP) so you can be confident of borrowing as much as you need. Check whether your estate agent vets potential buyers’ financial credentials, and confirm with them – as well as with your conveyancer – whether they will chase up any delays.
As with so many things, communication can be the key to success. Keep in touch with as many people involved in the chain as possible. At the very least, keep in regular contact with the professionals working on your behalf. And do your best not to be the link in the chain that breaks.