“Chain Free” Meaning: Everything You Need to Know about Property Chains
Buying a house can be very exciting, but the process is often made difficult by property chains. This is when multiple home owners and buyers are linked with nobody able to buy or sell because one or more people in the chain haven’t found a buyer or received an acceptable offer. A property chain will usually go back for many steps and can bring your entire buying process to a standstill for many months. Often, the best thing to do is to avoid this problem altogether by purchasing a “chain free” property.
In this article we will explain “chain free” meaning, how to find a property without a chain, and how Kuavo can help keep a property chain moving.
What is a property chain?
A property chain is a sequence of buyers and sellers in which nobody can complete their transactions because the last person hasn’t yet purchased or sold. A home buyer makes an offer on a house, but they don’t have the funds to buy it unless somebody else agrees to sell theirs first. The seller doesn’t accept that offer, so both parties are stuck waiting for something to happen at the end of the chain.
In these situations, delays can be significant, and you could ultimately be stuck indefinitely. It’s not uncommon for a sale to take six months or longer, and it can be very difficult for buyers who need a mortgage. A property chain is an obstacle that you should avoid at all costs by finding out if there are any chains before making your offer on the house.
What problems do property chains cause?
Property chains often lead to failure because nobody wants to put their life on hold while others play musical chairs with properties. After a certain point, patience wears thin and this leads to disappointment and ultimately financial loss as buyers withdraw from offers and homes fail to sell. When it comes to buying or selling a property, time really is money. For example, the longer you are stuck in limbo, the more your deposit will be eaten up in rent and the less money you’ll have to afford a new home.
How do property chains affect mortgages?
In a chain, one or more people’s mortgages won’t be approved until somebody else completes. If you have a mortgage in place and the sellers of the property at the other end aren’t willing to close quickly, it can affect your approval process. This means that you could encounter problems if another person in your chain doesn’t get their house sold soon enough, because this might put pressure on lenders to withdraw from certain deals.
How can I find out if there is a chain?
While some people may not want to tell you about their chain status because they’re worried about losing your offer, most sellers and estate agents should be happy to give you an idea of where things stand at the moment. This information could potentially save you thousands of pounds and months of hassle. If anybody has recently made an offer on the house and it’s been rejected, then you can probably assume that there is a chain.
However, the only way of knowing for sure if somebody else is involved in your potential purchase is to ask them directly whether they have made an offer or received one themselves. Our experienced estate agents will be able to give you this information without breaching confidentiality because their job is to help everyone get through the transaction as smoothly as possible. We understand how important time and money are when buying property so we will help to ensure there are as few delay as possible.
How to avoid being part of a property chain
Get in touch!
The first step towards avoiding chains is always going straight to an experienced estate agent who knows all about them because they cause problems every day! Our highly experienced estate agents can help with every stage of the process to make it as smooth as possible.
Only deal with buyers who aren’t in chains
The best way to avoid being in a property chain is to only deal with buyers who aren’t already part of one. Our agents can look into any property you are considering to check whether there is a chain, and how difficult it will be to get your purchase or sale over the line.
Sell your property early
Most people need to sell their current property before they have the financial means to buy a new one. However, if you are stuck in a chain, the person who wants to buy yours (providing you with the money to make your own purchase) may be stuck trying to sell theirs. One way to avoid this is if you are planning to buy a house in the near future, then sell yours in advance to free up the money. You may not want to move for six more months, but by putting your house on the market earlier, you are more likely to receive an offer from somebody who doesn’t need to sell their own property first. This will then give you the money you need for when the right house becomes available.
Look for properties to purchase with no chain
Another way to avoid a property chain is by looking for properties that have no chain, such as the seller’s second home or a property that is up for auction because it has been repossessed or the previous owner has died. With these types of property, there is no owner who needs to find a house to move into before selling to you so there will be no hold up.
Buy a new-build property
Likewise, when you buy a new-build property, the seller will not need to find their own house to move into so there will be no chain-related delays or issues. New-builds also have other potential buying benefits such as potential discounts or free estate agent services.
How can you make a property chain work?
If you do end up stuck in a chain, experienced and dedicated estate agents like ours will be able to help you with the particular circumstances. For example, if we know that you are moving into your first home, we will help to ensure that everyone agrees on a completion date. This means that nobody is forced out earlier than anticipated which could leave somebody homeless in between properties.
Knowledgeable local estate agents may also have various useful contacts such as mortgage brokers and surveyors who may be able to speed up the process for everyone involved. These third-parties can help to break the transaction into smaller stages, such as getting a mortgage conditional on sale completion and then moving in after that. This means that each party will only need to deal with one intermediary at once which could ultimately save time and money for all.
Property chains are always difficult for everyone involved but there are certain things you can do to avoid being stuck in one. Sell your property early so that somebody else’s purchase doesn’t delay the sale of your next home, and look for properties which are chain free, meaning you won’t have to wait on other parties. If you do end up in a chain, make sure everybody has agreed upon a completion date as this could cause huge delays later down the line.
Speak to our experienced estate agents and we will be able to help make your next property purchase as smooth as possible.