Hypothetically, how would completion work in a circular chain?

pinkteapot

Contacted our EA to find out what's happening with our chain (person at the top is still looking for something).

It turns out that he wanted to view the one we've had an offer accepted on, but our offer was accepted before he could get in. If he'd managed to get it, it would have been a circular chain!

I.e. Person A moving to Person B's house. Person B moving to Person C's house. And Person C moving to Person A's house.

Hypothetical as we beat him to the house (!), but is a circular chain possible? What happens on completion day when the money is meant to pass up the chain?

Just curious as never thought about it before.

argomatt

I know of this happening the other way around, so I know it does work, but how it works I don't know I am afraid.

What happened to people I know was that the long chain was held up because the one at the bottom couldn't find a buyer.

What happened eventually was the one at the top of the chain bought that house as well as the one they wanted. This got the chain moving. I can't remember if they sold the bottom house in the end or kept it as a buy to let.

Dan-Dan

pinkteapot wrote: »

Contacted our EA to find out what's happening with our chain (person at the top is still looking for something).

It turns out that he wanted to view the one we've had an offer accepted on, but our offer was accepted before he could get in. If he'd managed to get it, it would have been a circular chain!

I.e. Person A moving to Person B's house. Person B moving to Person C's house. And Person C moving to Person A's house.

Hypothetical as we beat him to the house (!), but is a circular chain possible? What happens on completion day when the money is meant to pass up the chain?

Just curious as never thought about it before.

I`m confused , how can you have a circular chain in the circumstances you describe ? after all , two seperate partys cant buy the same house?

pinkteapot

I buy your house Dan-Dan, you buy argomatt's house, and argomatt buys my house....

Dan-Dan

lol had a hard day

StuC75

simultaneous \ conference call between all sols involved...

pinkteapot wrote: »

Contacted our EA to find out what's happening with our chain (person at the top is still looking for something).

It turns out that he wanted to view the one we've had an offer accepted on, but our offer was accepted before he could get in. If he'd managed to get it, it would have been a circular chain!

I.e. Person A moving to Person B's house. Person B moving to Person C's house. And Person C moving to Person A's house.

Hypothetical as we beat him to the house (!), but is a circular chain possible? What happens on completion day when the money is meant to pass up the chain?

Just curious as never thought about it before.

G_M

A waits till he receives cash from Z, then passes it to B, who passes it to C, who passes it to D.who passes it to E, who passes it to F,...... who passes it to Y, who passes it to Z who passes it to A.

Errr but A is still waiting.... errr (I think it's going to be along day!)

ging84

if all those upsizing were getting all the funding through a mortgage, so effectively no one would be any cash at all so there is no money to pass around.
I suspect they could all agree to exchange without any money, or for a pound if it needs money to make it legal, one person would have to step up and say i am willing to put in a pound to make this all happen, and then they'd get it back by the end of the day

franklee

I'm only guessing but do the solicitors reduce the amount of money being passed all along the chain by the price of the bottom house? The person at the bottom pays (his purchase price less his sale price) first. The money goes up the middle links. The person at the top of the chain receives his money last (being paid the price of his house less the price of the bottom house). Maybe no one gets their new keys until all the money has moved? I suppose if any of the links fail they call the whole thing off as everyone will fail to complete?

Alternatively given people have completed circular chains, does it prove the existence of time travel :eek:

G_M wrote: »

A waits till he receives cash from Z, then passes it to B, who passes it to C, who passes it to D.who passes it to E, who passes it to F,...... who passes it to Y, who passes it to Z who passes it to A.

Errr but A is still waiting.... errr (I think it's going to be along day!)

Is that a predestination paradox :shocked:

ValHaller

pinkteapot wrote: »

What happens on completion day when the money is meant to pass up the chain?

I think completion day is fairly straightforward if the contracts are in place.

Getting the contracts exchanged is more problematic, but essentially the solicitors would have to do conditional exchanges, dependent upon the chain being complete.

The solicitor at the bottom could initiate exchange, confirming he holds the difference deposit from his client (deposit on difference between price bottom client is selling at and price he is buying at). Solicitors up the chain could confirm they hold respective difference deposits less the deposit on the bottom property - thus all effecting conditional exchanges. At the top, the solicitor would confirm he holds the full deposit for the bottom property and this message could pass all the way up the chain, making the exchanges unconditional.