Prepare for the Worst When Your Property Chain Breaks Down

22 Nov Prepare for the Worst When Your Property Chain Breaks Down

Buying or selling a home can be stressful, especially when you’re part of a property chain. A property chain is a series of linked transactions where each sale relies on another to complete. If one link fails, the whole chain can collapse, leaving you with delays, financial stress, or even the need to restart the process.

While you can’t control everything, preparing for the possibility of a broken chain can help you manage the situation and reduce disruption. This guide covers what property chains are, why they break, and how you can prepare for and handle these issues.

What Is a Property Chain?

A property chain involves multiple buyers and sellers, all interdependent. If you’re selling your current home to buy another, your buyer may also need to sell their property, and the person they’re buying from might be waiting to move into a new home, too. These interconnected transactions form a chain.

Here’s a simple example of a property chain:

• You’re selling your home to Buyer A.
• Buyer A is selling their property to Buyer B.
• You’re buying a home from Seller C.

If Buyer A cannot sell their property to Buyer B, it delays their purchase of your home, which in turn delays your ability to buy Seller C’s property.

Why Do Property Chains Break?

Several factors can disrupt a property chain. Here are the most common causes:

1. Financial Issues

Buyers often rely on mortgages to fund their purchases. If a lender rejects a buyer’s mortgage application or a buyer faces unexpected financial problems, the chain can grind to a halt.

2. Survey Problems

When a property survey reveals issues like structural damage or subsidence, buyers may decide to renegotiate the price or pull out altogether.

3. Legal Delays

The conveyancing process, which involves transferring ownership of a property, can be slow. Delays in paperwork or disputes over contracts can hold up the chain.

4. Change of Heart

Buyers or sellers might change their minds about moving, whether due to personal circumstances or second thoughts about the property.

5. Gazumping

This happens when a seller accepts a higher offer from another buyer after agreeing to sell to you. Gazumping is frustrating and can leave you stranded.

6. Unrealistic Timelines

If one party cannot meet the agreed-upon completion date, it can disrupt the chain for everyone else.

How to Prepare for a Broken Property Chain

While you can’t always prevent a chain from breaking, you can take steps to reduce the risk and soften the blow if it happens.

1. Choose the Right Professionals

Hire experienced estate agents, solicitors, and surveyors. They’ll guide you through the process and help prevent delays caused by errors or inefficiency. Look for professionals with strong reviews and a track record of handling complex chains.

2. Communicate Regularly

Stay in touch with everyone involved in the chain, including your estate agent, solicitor, and buyer. Prompt communication can help you spot and resolve issues early.

3. Organise Your Finances

Make sure your mortgage is pre-approved before making an offer. If you’re selling, confirm that your buyer has their finances in order, too. Having a financial buffer can also help you manage unexpected costs if the chain breaks.

4. Negotiate Flexibility

When possible, negotiate flexible completion dates with your buyer and seller. This can provide extra time to resolve issues without collapsing the chain.

5. Plan for the Worst

Think ahead and have a backup plan in place. This might include:

• Temporary accommodation if you need to move out before buying your next home.
• Self-storage to keep your belongings safe during delays.
• A contingency fund for unexpected expenses.

What to Do if the Chain Breaks

If your property chain breaks, don’t panic. Follow these steps:

Assess the Situation

• Who caused the breakdown? Identify whether the problem originated with your buyer, seller, or another party.
• Can the issue be resolved? For example, if a mortgage fell through, can another lender be approached?

Explore Temporary Solutions

• Renting: Move into short-term rental accommodation while waiting for the chain to reform.
• Storage: Use a self-storage facility, such as those offered by Hills Self Storage, to keep your belongings safe and accessible while you figure out your next steps.

Re-market Your Property

If your buyer pulls out, consider putting your property back on the market. An experienced estate agent can help find a replacement buyer quickly.

How Self Storage Can Help

When a property chain collapses, you might find yourself needing to vacate your current home before securing your new one. This is where self-storage comes in.

Benefits of Self Storage During a Chain Breakdown

• Secure Storage: Keep your belongings safe until your housing situation stabilises.
• Flexibility: Rent storage units for as long or as short a time as you need.
• Convenience: Access your items anytime, making the transition smoother.

At Hills Self Storage, we provide flexible storage options to suit your needs during these challenging times. For more information, explore our available storage options or contact our team at  01206 625045 for a free quote.

FAQs 

1. How long do property chains usually take to complete?

On average, a property chain takes 8-12 weeks to complete. However, delays are common, especially in longer chains.

2. Can I avoid being in a property chain?

Yes, buying a chain-free property or selling to a cash buyer can eliminate the risks associated with chains.

3. What happens if my buyer pulls out?

If your buyer pulls out, you’ll need to find a new buyer. This can delay the process significantly.

4. Is it common for property chains to collapse?

Yes, property chain breakdowns are fairly common. Around one-third of all property sales in the UK fall through.

5. What’s the best way to recover from a broken chain?

Act quickly to resolve issues, find alternative solutions, or re-market your property. Staying proactive is key.