Property chains and why it all takes so long
A property chain is created when there are multiple transactions that are related and all need to occur at the same time for each sale and purchase to conclude.
If you already own a property, it is likely that you will need to sell your current property in order to be able to purchase your new property. If the person buying your property also has a property to sell, this will add another link to the chain. If however, you are a first-time buyer you won’t need to sell in order to move, which arguably will make you an easier buyer to work with from a seller’s point of view.
The longer the chain the greater the chance of one element of the chain not doing what they promise and as a result, this will break the chain and potential stop all of the buyers and sellers in the chain concluding their sales and purchases.
There are many reasons for a chain to collapse but they include:
- One of the buyer or sellers decides they don’t want to proceed.
- One of the buyers has problems securing a mortgage.
- A property survey reveals unknown problems and the buyer does proceed.
- One of the legal firms may be slow in processing or requesting information.
- A buyer or seller tries to renegotiate the terms of the transaction.
- There are unforeseen events, like sickness, that stop the momentum.
It is often difficult to avoid a chain but good communication is often the key to limiting the risk of a problem.
Other steps you can consider are:
- Don’t just choose a conveyancer based on price. If they have good communication skills and are able to work quickly, this will save time and money in the long run.
- Have the finance in place early before you find the property.
- Regularly speak to everyone involved in the transaction, especially the estate agent and conveyancer to keep the momentum going.
- Be honest – if there is something that you think might affect the transaction flag it up early.
- Keep a track of the paperwork, most transactions are dealt with electronically these days and you may not get them all at the same time.
- The paperwork will require original signatures and therefore takes time to arrive.
- If you are selling as well as buying, you will have to supply information about the property, make sure you have this to hand in advance.
- Talk about time frames. It is good to discuss potential time frames early so that each party is clear on what the goals are so that when you try and push things along it is not a surprise to anyone.
- If there are multiple buyers or sellers agree for one person to be the contact so there are fewer people involved.