The Property Chain is can often be fragile which is why there is nothing more frustrating than a house sale falling through at the last minute.
This is especially so if an unexpected issue arises in the chain that causes it to break and collapse, which leads to lengthy delays and increased costs for all parties.
It is estimated that one in five house sales fail because of property chain breaks, and it’s an issue that many developers are often powerless to prevent – or even solve. And it’s not just broken chains that are an issue as its equally frustrating to be stuck in a sluggish one, where one or more parties face hold-ups such as securing finance, rectifying issues revealed by surveys or just plain old inertia.
For this reason, Silverbridge offers developers a Chain Break service, which means that the successful sale of your customer’s home is now no longer reliant on a third party and enables you to regain control of the sales process.
What can cause a chain break?
Developers often find that their customers first need to sell their existing properties before they can buy their new home. This will invariably place them into a property chain with other buyers and sellers and, as all transactions are linked together, everything needs to go smoothly for the property chain not to break. With so many factors at play, these chains can be highly volatile which can slow things down or, at worst, cause a sale to fall through. It can be as simple as one party changing their mind about their purchase or sale, or other factors such as family issues, illness, or redundancy. Other reasons that may cause the property chain to break include:
- Surveys reveal problems with the property, such as structural issues or costly covenants leading to the buyer or lender pulling out.
- A party fails to obtain a mortgage or has issues passing money laundering checks.
- A lower property valuation, by a lender, resulting in the owner not being able to be raise the full amount needed.
- A seller is unable to find a property to buy and is therefore unable to continue the sale of their own property.
- Market forces, such as a worsening economy or pandemic that may cause parties to withdraw due to uncertainty.
- Legal paperwork has taken too long to be filled out by a legal firm and buyer loses interest.
- Changes in personal circumstances, such as redundancy, illness, or divorce
- A party is Gazumped. It is only after you have exchanged that an offer is legally binding, and not at the negotiation stage, which makes Gazumping a regular occurrence.
- A party being Gazundered; meaning that a buyer reduces their offer at the last minute, which could result in the seller being unable to accept and the chain breaking.
What is the impact of a broken chain?
It takes, on average, 3 to 4 months for a seller to find a buyer, and then for their property to exchange and finally complete on the sale. Statistically, chain breaks predominantly occur in the later stages of the sales process meaning that the developer has to contemplate a further few months of delays before the sale can be finalised. The consequence of this is further pressure on precious cash flows and the risk that the deal may eventually collapse, putting the developer right back at the beginning.
For people who have already paid their deposit for a new home, relocating for work, wanting to move to be within a catchment area of a school, or for a couple moving in together or divorcing, they need a greater degree of certainty and a clearer idea of when their sale will go through so they can secure their next move.
Once a chain break happens, and the developer’s customer loses their buyer, the property would have to be put back on the market. A new buyer will need to be found and the legal process needs to start from scratch, with the hope that this time around all will proceed smoothly.
This may not be an acceptable situation for the developer and it’s at this point that they turn to us to help them remedy the position. Our team of property experts can help get the sales process back on track by accelerating house purchases and by providing exceptional customer service. We can step in anywhere in the chain, meaning that we can buy your customer’s property, or even the property of your customer’s buyer or vendor.
We provide a no-obligation service which means that if your customer, at any point, decides not to take up the offer of our Chain Break service, then there are no costs to pay. We are experts at analysing the surety of the chain – no matter how long – in order to identify the quickest, and most cost-effective, way to repair it.
For more information on our Chain Break service click here or contact us 020 3780 0780 to discuss how we can help you regain control of the sale process.