Buying in chain
By Jo Eccles
We’re seeing more of our buying clients caught in property chains, which means that their seller has an onward purchase that needs to be tied into the sale. Whilst this is a common situation, in practice it can be a logistical nightmare.
The longest chain we’ve had to deal with was 6 properties and our client was at the bottom of the chain. Unfortunately, we were ready to exchange very early on and we had to sit and wait for each onward seller to find a property to buy and then get themselves into a position to exchange. In the end, we had to project manage the entire chain, liaising with 7 sets of solicitors, 6 estate agents, 6 surveyors and numerous damp specialists, chimney reports, and so on. It took us almost 6 months to get our client exchanged and without us, I have no doubt the chain would have collapsed through poor communication, or simply buyer and seller frustration.
If you are in a chain, be prepared for the worst, which is the chain falling apart, losing your fees, and having to start your search all over again. However, there are some steps you can take to be flexible if the chain is looking wobbly. For example, if your seller’s onward purchase has fallen through, you can agree to sit patiently and wait for them to find a replacement property. The risk is that by the time they do, prices may have increased and your seller might ask for more money for your purchase or put the property back onto the market. Keep an eye on the market whilst you’re waiting in case another property comes up, but, if what you’re buying is genuinely great, it may be worth the risk waiting.
Another option is to ask your seller to exchange on the sale, but agree a long stop completion date. This is when a much later completion date is agreed and it can be brought forward by mutual agreement if your seller finds a property sooner. We’ve had clients agree to completing up to a year after exchange. Above all, good communication throughout the chain is key, and don’t be afraid to ask to speak to the other buyers and sellers to ensure that all updates are being filtered through.
If you have a question you’d like Jo to answer please email firstname.lastname@example.org or tweet her @joeccles.