A chain is a line of buyers and sellers involved simultaneously in
property transactions that are linked to each other. If one transaction goes wrong or is delayed
the chain breaks and the effect is felt top to tail of the chain.
It is a common problem because chains happen in up to 85 per cent of
property transactions, sometimes starting with a firs time buyer and linking
along a line of existing owners.
The chain can end with an owner who just wants to sell maybe on behalf
of a deceased relative or to move abroad. When the market is buzzing with more
buyers than homes chains tend to be strong. Purchasers may overlook minor
faults when viewing or reading surveys. When the market is sluggish chains
tends to be slower as buyers have a wide choice and can be more pernickety.
Whose
the weakest link!
Links break for a variety of reasons:
- Many fail because of
tight deadlines for paperwork being missed or finance falling through at
the last minute.
- Until contracts are
exchanged the buyer has no legal obligation to buy so they can simply
withdraw their offer and have to pay no costs the seller may have
incurred.
- The survey reveals a
problem with the property previously not known.
- So in the vast majority
of cases the weakest link is simply because someone in the chain changes
their mind.
- Delays by a lender making a formal mortgage offer to the buyer. Until the mortgage offer is made contracts cannot be exchanged.
Gazunderer
or Gazumper!
Gazundering happens when a potential buyer reduces their offer at the
eleventh hour just before contracts are exchanged.
Alternatively the seller may accept an offer for their property and then
tell the buyer that they have been offered a higher price by someone else.
Avoiding
a broken chain
- Avoid chains in the first
place Find out about potential buyers and you can choose to decline their
offer if they are stuck in a chain. Also find out about the people you are
buying from as the chain can break both ways.
- Make sure all finance is
in place and avoid you becoming the weakest link. Have the mortgage offer
in place before you start making offers.
- If you really have to buy
before your sell or visa versa there is the option of getting a short term
loan (bridging loan) which can cover any financial shortfalls in the short
term and can normally be done quickly.
- A property can typically
sell within three months of being put on the market. If your property is
still for sale after this time the asking price may have fallen out of
line with local levels and you may have to be prepared to lower your
asking price.
- Sell your property first and opt for rented accommodation while you look for a new home is another option.
David Jordan Estate Agents are on hand to
welcome you as a new client or welcome you as one of our existing clients with
lot of advice and tips to help you.
Call or email us using the details on our
website www.davidjordan.co.uk
T: 01323 898414
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