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What Is A Property Chain?

3 January 2020

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A property chain is the term used to explain when more than one buyer is involved in a transaction. It happens when buyers and sellers are linked together as their purchase or sale is dependent on another transaction.

People who are selling their current home and buying another at the same time will become part of a chain. This is due to the fact that you will be reliant upon the completion of the sale of your current home, in order to be able to finance the purchase of your next.

It is not only the buyer and seller that are involved in the chain but also the estate agent, the conveyancer, surveyor and mortgage lender. It is therefore important to make sure that each party involved in the chain is working towards a completion date and communication between all parties is clear. One missed phone call or unsigned document can cause a halt in the process.

How to avoid getting into a property chain?

There are a number of steps you can take to avoid being part of a property chain, or to at least avoid being part of a long, complicated chain, including:

1.Choose a first-time buyer, or someone who isn’t in a chain themselves if you have the benefit of having multiple offers on the table.

2. If you’re a first time buyer try to look for a property where the upward chain is short or non-existent, i.e. where the home is being sold by a property developer who doesn’t need to sell their own home to complete the sale.

3. If you have plenty of offers on the property that you are selling but haven’t yet had an offer accepted on a home that you want to buy, it could be worth moving in with relatives, friends or into short term rented accommodation. This way when you do find the right home for you, you are in a better position to have an offer accepted as a chain free buyer.

4. Purchasing a new build property automatically comes with no onward chain. Developers may also offer a part-exchange on the property that you are selling to speed up the process. This may however mean that you accept an offer lower than you could achieve on the open market.

5. Having a mortgage in principle will make your offer more appealing to sellers, and if you’re selling make sure that your prospective buyer has a mortgage in principle which will prove that they are capable of providing the finances to purchase the property.

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How can I keep a property chain moving?

There are many different parties that need to work together to keep the property chain moving. In order to help your property transaction to complete as quickly as possible and to avoid any delays in the chain you can:

1.Appoint a conveyancer with a good reputation to complete the legalities of the sale/purchase. Read online reviews and ask friends and family for recommendations.

2. If selling, instruct an estate agent who is experienced in selling similar types of property to your own.

3. Promptly sign and return all paperwork.

4. Keep record of all correspondence between all parties.

5. Speak to your property solicitor and estate agent on a regular basis to track progress and to find out if there is anything that you can assist with to speed up the transaction. Return phone calls as early as possible.

6. If you’re a seller make sure that you have all relevant property certificates to hand such as electrical and gas installation certificates, along with copies of planning permission forms if you have made any alterations to the building. Your buyer’s solicitor will require copies of these before completion will take place.

7. Have a survey completed as early as possible. The survey may reveal faults with the property which may influence your decision to continue with the purchase, or may lead to you reducing your initial offer to reflect remedial work that needs to be done. It is important to send the results of the survey to your solicitor to review as soon as you receive it.

8. Choosing a proactive solicitor will mean that searches are instructed early on. Some local authority searches can take up to six weeks to arrange – depending on the area in which the property is situated. This can be one of the biggest delays in the property chain.

9. If you’re a buyer make sure that you have the deposit in the bank ready to transfer to your solicitor at the time of completion. The deposit is typically 10% of the value of the home.

10. Agree on a completion date and ensure that all parties are committed to exchanging on this day.

True Solicitors are experienced residential conveyancing lawyers, who will handle your transaction on a no completion, no fee basis. Contact us today for a free, no obligation conveyancing quote.

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