If you’ve been thinking about buying a property that’s in a property chain, or you’re currently stuck in a chain, read on to find out what a property chain is and how you can break it.
What is a property chain?
First things first, let’s clarify what a property chain is and how it works.
A property chain consists of multiple buyers and sellers who are all connected and dependent on the next person to complete their sale. So, for example, if you’re interested in buying a property that the seller is currently occupying, and you have to wait until the seller buys their next property, you’re in a property chain.
Property chains can include several buyers and sellers. The longer the chain, the more complicated it can become, especially if the buyer needs to secure a bank loan to complete the buying process.
What is an example of a property chain?
To put things into perspective, let’s say, Arthur, who’s currently renting and is a first-time buyer, has found his dream flat. His finances are in place and his offer has been accepted by Sally. However, Sally (the current owner of Arthur’s dream apartment) has also found her next home, but has had to wait until she found a buyer for her flat. Now that Sally has found her buyer, she can get her finances in order, which will then allow her to place an offer on her next home.
Here’s what a chain could look like. Note that in this diagram, the Smiths are also searching for a new home, meaning that the chain could keep going until someone breaks it by either moving into rented accommodation or buying without having to sell their property first.