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The Beginner’s Guide to Property Chains

Property chains explained

Property chains are common causes of failed house sales. They can be complicated. But if you’re selling a house, you have to know exactly how they work — and how they might scupper your chances of a fast property sale.

Property chains explained

A property chain occurs when homeowners decide to sell their current home to fund the purchase of another. The acquisition of one property is reliant on the sale of another. And several houses can be part of the same property chain. If one sale collapses, the whole chain can follow suit very quickly.

Imagine you’re selling your current home to upsize. You need the proceeds of the sale so you can raise the necessary deposit and finance for the purchase of your next property.

Now imagine you’ve had a bid accepted on your dream home. If the sale of your current property falls through, you can’t buy your next house. Not only are your plans delayed, but so are the plans of the owners of the home you planned to purchase.

What is the average property chain length?

What are property chains?

The average property chain length is probably longer than you think. But the exact period is very difficult to calculate. A particularly long property chain might involve eight buyers and sellers. However, the national average in the UK is probably nearer four.

The collapse of a single property sale within a chain can affect everyone in that particular chain. Fortunately, an entire property chain can be repaired very quickly by finding a new buyer for the problem home.

What are the causes of property chain collapses?

An entire property chain can collapse because of the failure of just one sale. There are many potential reasons, but here are a few of the most common:

  • A buyer in the chain is “gazumped.” This is when a seller accepts an offer on their property, only to accept a better offer at the last minute.
  • A buyer in the chain lowers their offer at the last minute — a phenomenon known as “gazundering.”
  • A seller in the chain decides to take their home off the market at a late stage in the process.
  • A buyer can’t secure the deposit or the mortgage needed for a property.

How to fix collapsed property chains

How to fix a property chain

Collapsed property chains are common. The average property transaction on the open market is complex. The more there are in a chain, the more likely a collapse is. The good news is that things can be rectified in many ways.

  • A seller rents a house or moves in with family — instead of buying at the same time.
  • The affected buyer decides to purchase a new-build, chain-free property. There are no incumbent owners, so there’s no upward chain to worry about.
  • The affected seller lowers their asking price to secure a fast and reliable offer.
  • A seller in the chain decides to sell to a first-time buyer, who doesn’t have to sell their property.
  • Sell to a fast house buying specialist such as SellHouseFastCash. This ensures a speedy sale at a competitive market price.

By selling your home to a specialist buyer, your home is effectively chain-free. Once an offer is made, the entire transaction should complete within a few weeks. This could be the best way of putting a broken property chain back together if your house sale is the cause.

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