Dummy question on property chain

WorriedBorrower

Hi all.

Just bought my first property, not exactly what I wanted, but what I could, as I am still at the first step of the ladder :-) I think that is the majority of the cases (I hope).

Out of curiosity, when I sell this property, how does the (in)famous chain work? I put my house on the market and receive an offer. Only after that, I find a property and make an offer myself.

What if it takes a while between the time I get an offer and find a property? Is it usual to make an offer with the condition I sell my house? Do buyers usually wait for these chained events? Is it acceptable if I only commit to buy when I when my house is effectively sold (exchanged) or are both exchanges linked together? I believe anyone can break the chain at anytime before exchanging, right?

Thanks!

JimmyTheWig

You are right that anyone can break the chain before exchange. The same was true when you bought your current property - either you or your vendor could have pulled out before exchange.

Generally you only put an offer in on a new place once you've found a buyer for your current place.
The problem is finding a buyer can take months. Finding someone to buy only needs to take a week at most.

Obviously it makes sense to look around at properties before you've got a buyer for yours, as you then know what you're looking at when the time comes.
Part of the sale process may come down to what happens if your sale is ready before your purchase. Some people may be prepared to move out before the purchase has completed (e.g. move in with parents for a short while) but others won't be.
If you aren't prepared to move out before your purchase has completed then you can expect your buyer to start to get cold feet if you haven't found anywhere to buy within a few weeks of accepting their offer.

As I'm sure you are aware, it's a very stressful time!

PasturesNew

You put your house on the market and start looking yourself - but you can't put any offers in until you've got a buyer for yours.

Once you've got a buyer for yours you need to decide on a house to buy pretty quickly, or commit to moving out and renting while you continue to look. You not finding somewhere shouldn't become the problem of your buyer, it's your problem.

pinkteapot

PasturesNew wrote: »

You put your house on the market and start looking yourself - but you can't put any offers in until you've got a buyer for yours.

You can put offers in. The seller isn't overly likely to accept them, but they might if they've had their house on the market for ages and they think you'll get a buyer for yours quickly.

PasturesNew wrote: »

Once you've got a buyer for yours you need to decide on a house to buy pretty quickly, or commit to moving out and renting while you continue to look. You not finding somewhere shouldn't become the problem of your buyer, it's your problem.

Again, not always that black and white. Our buyers waited two months for us to find somewhere. We were honest when they viewed that we wanted something specific and had to wait for it to come up. We accepted their offer but told them we would be looking, it might take a while, and we understood completely if they found something else they'd rather buy in the meantime. As it was, they waited for us. If they'd found something else then we would have remarketed.

They offered us the price we expected to get quite easily from anyone. If they'd have offered more (going over a stamp duty threshold) then we'd have taken they money and got out fast and rented. There was no point us going to that effort and expense when we could easily have got another buyer at the same price though.

We (and they) then had to wait another month for the chain to be complete. Our vendors found quickly but the person above them took a few weeks. Fortunately they bought a no-onward-chain property!

Other tips, OP:

I found being in a chain horribly stressful. We were buying our dream house and I was constantly nervous that we'd lose our buyer (e.g. their mortgage would be declined). If I move again, I'll sell up and rent and then start looking.

If you're in a chain, don't spend any money until the chain is completely formed. I.e. FTB or cash buyer at the bottom, and no-onward-chain at the top. There is absolutely no point spending money on survey, mortgage application, conveyancing, etc, until you've got a whole string of people ready to start doing stuff. It sometimes happens that someone at the top of a chain gets fed up with the pressure on them to move and decides not to sell after all.

Thrugelmir

PasturesNew wrote: »

You not finding somewhere shouldn't become the problem of your buyer, it's your problem.

All part of getting a chain together. Moving into rented property isn't a straight forward answer as creates issues of its own.