“I’m in a long property chain and not sure what to do?” “There are sealed bids involved in my chain and I’m wondering how that could affect my sale?” “Do I need to know how long the chain is before I commit to it?” Are some of the questions we have been hearing from prospective buyers lately, so we sat down with one of our agents Fiona Dando to get some common queries about chains answered
Q: I am buying a property in a chain-should I be concerned?
A: In an ideal world a property transaction would contain only two parties - A sells to B. In the real world we sell our homes and we need to buy another home, the person selling that home needs to buy a home and so on and so on and these transactions become linked forming a chain. A chain is not a matter for concern but it does need to be managed by all the agents involved and the longer the chain the more inherent risks there are of the chain breaking.
Q: How do I find out about the length of the chain?
A: All agents in the chain should check the full length of the chain with all the other selling agents. They should check progress of the linked transactions, some sales may be more advanced than others depending on whether they are freehold/leasehold properties as the conveyancing of leasehold properties usually takes longer. The agents need to ensure that the chain is complete. These details are recorded by agents and should be made available to the client and buyer.
Q: Why do chains break down?
A: Usually due to a buyer in the chain pulling out. This can be for a number of reasons: personal circumstances, poor survey, inability to secure the necessary financing.
Q: What can be done to reform the chain?
A: Either adding back in a new buyer or sometimes a chain can be reformed if another party is prepared to break the chain for example going into rented accommodation rather than linking in another purchase.
Q: As a buyer or vendor what can I do to be proactive?
A: The short answer is to be organised. For a chain to be successful it needs to work in unison. Communication is key - all parties need to communicate fully to manage expectations and keep the momentum. Ask your conveyancer about their current workload and what realistic times scales they can work to and contact them regularly to check progress. Make sure that they are in funds for searches as soon as requested. Likewise if you need a mortgage, check timescales for valuations with the lender. Speak to the agent! It is our role to ensure that the sales are progressing. If you are selling a leasehold property, management company enquiries will form a significant part of the conveyancing process. You may need to pay for a management pack but ask your solicitor at the onset what they are likely to need and prime your managing agent/management company secretary.
Q: I have a buyer, but I am trying to secure a property that is going to sealed bids should I be worried?
A: To put you in the best position make sure that you have all your documentation available for the selling agent e.g.ID, proof of financing etc. Also ask the agent to call your agent to verify your buyer’s position. Usually the highest bidder will secure the property but beware of offering way over the asking price as a lender can down value at point of valuation.
Regrettably you may lose the property so don’t stop looking. You need to retain the interest of the buyer as they won’t wait forever. It may not be ideal but consider breaking the chain, if you have other options e.g. moving in with family for a short period or even renting.
Q: How do we all agree on dates to move?
A: Again communication. All parties have to agree dates for exchange/completion to work simultaneously. Don’t fixate on dates or start booking removals until late in the transaction as this can be counterproductive if these timings prove to be unviable and your risk losing deposits for aborted removals. Tell your conveyancer and agent if you are going to be on holiday etc and check who will be handling your case in the event that your conveyancer is on holiday. The agent plays a critical role in this as they will check up and down the chain the viable dates that work for all parties.
If you have further questions about property chains, don’t hesitate to call us in the office. We would love to help.