Property Chains - What Can Go Wrong?

Weak link in the property chain

Ah, property chains; the bane of everyone who's ever been in one. While selling property would be a whole lot easier if every buyer was a cash buyer with no property to sell, and every seller was moving into rented accommodation or already has another property they're living in, the reality of course is things are rarely that simple.

The more people there are in a property chain, the more complicated things become and the more likely it is that a sale will fall through:

  • You are dealing with surveys on multiple properties, so the chances are higher that one of those properties has issues. When this happens, either the seller has to be willing to drop the price or carry out repairs, or the buyer has to agree to take on the work themselves after they've bought the property. If neither party can agree then the sale on that property falls through, and everyone else in the chain is affected
  • Multiple mortgage valuations. Unless the buyers are purchasing in cash then they will require a valuer from their mortgage lender to visit the property. It just takes one over-zealous valuer, one non-standard construction property, or one whiff of subsidence or Japanese knotweed, and the whole chain can collapse because the buyer can't get the lending they need
  • Multiple solicitors. Even when there is no chain you are dealing with two solicitors. Quality between solicitors can vary wildly, and if just one of them is poor at communicating with their client and the other solicitors in the chain, and lets emails and mail go unanswered for several days or longer, then everyone suffers. There are also several sets of searches and enquiries, increasing the potential for uncovering something which puts a spanner in the works.
  • People's situations change. The more people in the chain, the more chance buyers or sellers back out for whatever reason - the FTB who gets cold feet, the seller who decides actually they want a bit more for their property, the divorcing couple who won't agree to sign the papers, the buyer who was moving for work but then the job fell through.

If everyone in the chain is reliant on the sale of their property going through in order to purchase their next property then everyone in the chain needs to complete on the same day. So if part of the chain is ready to move but another isn't, you can only go as fast as the slowest link in the chain.

There will usually be someone in the chain who is more time pressured to move than the others. Sales can often collapse simply because one party can't wait any longer for completion.

Related Articles

How To Stop Your House Chain Collapsing

Your Offer Is Accepted, Now What? A Short Guide For Buyers And Sellers

Published on 16 September 2015

Source Trinity Sales Wakefield

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