What is a Property Chain?
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A property chain is a series of linked sales that are ‘dependent’ upon each other – hence ‘chain’.
What is a property Chain?
A property chain is a series of linked sales & purchases where each transaction is dependent upon the other. The key definition of a chain is ‘dependent’. This means that each transaction HAS to coordinate to simultaneously complete things like move dates, new mortgages and so on.
In short, apart from the person at the bottom of the chain, each buyer/seller HAS to sell their existing home in order to buy their new home. This dependency is what creates problems with chains (and particularly when they break).
Do all properties in a chain exchange contracts on the same day?
Yes – almost always. Where a dependent chain exists, they will all exchange contracts on the same day – and usually set a completion date (the day you move) for the same date too.
Which property in a chain exchanges contracts first?
The property at the very bottom will exchange contracts first, then the next, then the next, and so on.
Can you break a property chain?
Yes, you can break the chain. This means ditching your buyer and the chain below you/them. But, you then have to find a new buyer and potentially a whole new chain!
Alternatively, you can break a chain by not needing to sell your home to buy your next place. That all comes down to money – as you will need to purchase your next house without selling your current home. This means raising finance independently of your current home and borrowing.
How do I avoid being in a chain?
You can avoid a chain below you by ensuring you are not needing to sell your current home to buy the next. You do that by:-
- Selling first (and eg going into rental)
- Raising finance against your current home
- Having enough money put aside in any event (ie not needing to sell your current home to finance your new one)
This removes a chain below you. You can not avoid a chain above you other than buying a property where there isn’t one (eg where someone has died).
What does it mean when a property is chain free?
A chain free property is where the person selling does not have an ‘ongoing dependent purchase’. This might be for example a probate sale.
What is the ‘top’ of a property chain?
The top of the chain is the last property where the person(s) selling do not have an ongoing dependent purchase. A common example of this is older seller’s going into care, or perhaps a probate sale.
Understanding the chain you are in can ease stress levels!
What is the ‘bottom’ of a property chain?
The bottom of the chain is the first property. It may often be for example a first time buyer will not have a ‘dependent sale’ of their own.
Why do property chains fail?
Property chains fail because one or more party in the chain can not or will not sell/buy. For example their own sale may fall through, they may have a change of circumstances, or they may simply get cold feet and change their minds about moving.
How do I find out how big the chain is that I am in?
Ask your estate agent! They can speak to other agents and solicitors up and down the chain and get a feel for what’s what.
Why does a house chain slow down exchange of contracts?
When there is a chain, getting to exchange of contracts can be very frustrating. However promptly you and your conveyancing solicitor deal with things, you can only exchange when EVERYONE in the chain is also ready to exchange contracts!
Why can’t my solicitor speak to other solicitors in the chain?
Your solicitor is forbidden from talking to anyone other than the solicitors directly above and below your transaction because of strict professional conduct rules.
Who can my estate agent speak to in the chain?
If you want to know what is going on in the chain you MUST speak to your estate agent, NOT your solicitor. Your estate agent has no professional conduct rules and so can talk to every agent up and down the chain to establish where the other transactions are at.
Do chains slow down conveyancing?
Invariably yes, chains will slow down the conveyancing process. A chain is only as strong as its weakest link and if one party wants a delay until completion then there will be a delay until completion!
What should I do if my property chain collapses?
Start all over unfortunately. This is why people are reluctant to ditch slow buyers as getting a new buyer (and a whole new chain) in below you can be even less predictable than the buyer you already have!
Want to know more about property chains?
If you have more questions about property chains that this, or the other great content on our site does not cover then do please reach out! Our team of expert conveyancing solicitors are here to help!
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