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What is a property chain?

Selling a property can be an emotional and frustrating experience at the best of times. The experience can be further complicated if you are involved in what is known as a property chain. A property chain is where you have a sequence of linked house purchases each dependent on the preceding and succeeding purchase. The longer the property chain the greater the risk that it can collapse. All it takes is for one buyer in the chain to withdraw from their purchase and all the linked purchases both up and down the chain will collapse. When you consider that one in three sales fail to complete once the offer price has been accepted then it is clear that being involved in a property chain is a fragile situation.

Property chain breaking solutions

There are three property chain breaking solutions to consider:

Sell before you buy
Obtain a bridging loan
Use Molae Properties’ property purchasing service

Selling before you buy

Although you avoid the pitfalls of a property chain you will face other challenges. For a start, you will need to find rental accommodation and move home. You also can not be certain how long you will need to rent. You should also consider that the market may move whilst you are renting. The market could move in your favour if property prices drop or it could move against you if property prices rise. Essentially, unless you have peerless economic forecasting skills you are taking a big gamble on the property market.

Obtaining a bridging loan

If you’ve found your dream home and you can raise a bridging loan to buy it this will avoid the property chain scenario. The downside is that you don’t know how long it will take to sell your home during which time you will have two mortgages to pay. Bridging loans are expensive with interest rates ranging between 10-20% per annum. You need to be confident that your property will sell on the open market within a reasonable time frame. Ideally, only sign up to the bridging loan once you have exchanged on the new property. Otherwise you incur the costs of obtaining the bridging finance without the certainty of having a property to buy. You still face the risk that the market could move against you and if your property doesn’t sell reasonably quickly you could find yourself under pressure to sell at a reduced price.

Molae Properties quick purchasing service

The final property chain breaking solution is to use our quick property purchasing service. The purchase can be organised quickly. The completion date can be set at a date to coincide with your ongoing purchase. The risk of the market moving against you is eliminated as the two transactions happen at the same time. This solution is quick, hassle free and removes all the financial uncertainties you face with the other solutions. It is undoubtedly the most convenient of the three solutions. In return, you must be prepared to sell your property at a discount to market value. As well as avoiding the property chain scenario this solution has the advantage of providing financial certainty. All the costs can be considered upfront. What you need to weigh up is whether the discount to purchase price outweighs the financial costs and uncertainties of the alternative solutions.

We will be happy to provide you with an offer to purchase your property to help you make this decision. To find out more simply enter your postcode and complete your details.

Why property chains break down

A broken property chain is one of the most stressful and annoying experiences for people looking to buy or sell property.

In many property deals, the various buyers and sellers are linked to each other, with one transaction often dependant on another. If one buyer or seller backs out of a deal, it can have disastrous effect on the whole chain.

Read More

Property Chains – A guide

Buying a house, along with divorce and the death of a loved one, is one of the most stressful experiences life can throw at us. When a buyer wants to sell their property it can result in a number of properties being dependant on one another. If one sale falls through, it can scupper the whole chain.

In fact, a recent survey by Spring Move found that over 2.2 million sellers in England and Wales have seen their house sales fall through in the last five years.

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Latest testimonial

The sale of my property was well managed with regular communication and advice and support provided throughout the process.  The company also provided legal support through one of their panel solicitors which was professional friendly and reassuring during what was a complex sale.  They are trustworthy and reliable and I would recommend this company to anyone looking to sell their property.  Thank you for making this a much easier process.
R. Mangal, Leyton, London, E10