Breaking the chain

Parties03

Is this a terrible idea? 

We SSTC our house back in April and got an offer at that time that was much over asking, significantly higher than any other offers we got also. We wouldn’t even close to that now - it would be around a 50k difference. 

We were honest at the time we hadn’t found a place and there would be a wait. 

Due to everything going on, we missed out on a few houses that went for way over ashiny, beyond our budget, but  have now found a place we want.  It’s not likely that we can complete both our sale and purchase simultaneously, but we are pushing to at least exchange before we complete on sale of our house. The buyer at bottom of the chain has their mortgage offer expiring end of jan and want to complete by then, or pull out. If they pull out the whole sale will collapse and we won’t get our offer price again probably for a number of years; even if house prices do plummet I think it will be an overall loss to us for what we could afford later. 

The risk of us breaking chain is that our purchase falls through and we would need to rent for who knows how long.  

Best case scenario: complete sale, exchange on purchase sand time and we rent or stay with family a couple of weeks - EA tells me this should be possible and I have to take their word for it.  Worst case: it takes longer or it falls through and we rent until we do find a place, rent would be about 500 more a month than mortgage so not insignificant but doable.  But also we would be stuck there for 6 months if we had to. 

Any advice appreciated! 

propertyrental

well to start with take whatever the EA says with a pinch of sale. They just want a sale to complete and their commission paid- never mind their client's personal circumstances!

If you sell before buying, you need to have n place a plan for where you will live, and for how long. Consider worst case ie 6+ months. Will your family drive you mad? If in rented, consider the fixed term you'll be tied in to. And the cost.

Consider also the disruption, stress and cost of moving twice. And possibly putting furniture into storage.

You need to factor all this into your financial planning, and your practical plans- not just take an EA's vague "It'll be fine" at face value.

TheJP

Not sure why the EA would have any thoughts on this as its 100% up to you as is the risk. Would likely need to be an medium term airbnb which could cost more than a normal rent but you wont get a residential rental for a couple weeks tenure. If you can plan it out 3 weeks, 6 weeks, 3 months, 6 months, 12 months scenarios and what the costs may be. Maybe put belongings into storage and stay with family for a few weeks if they are happy and go from there.

jenni_fer

This is exactly what we have just signed up to. 
We accepted an offer on ours back in Jan, market is/was crazy here and we seemed to attract flaky sellers so it took us until start of Oct to have the current offer accepted.
Our buyers said they had to be in by Nov (which they got extended by a month....check what the lender they are with might do) and our sellers wouldn't commit to earlier than 31st Jan so we have agreed to move out next week and in with family until we complete on the purchase.
Far from ideal, but we needed to break the deadlock.
We'd have never agreed without exchanging on both at the same time though,  we have no desire to fall off the property ladder and get stuck renting.

lookstraightahead

Renting isn't a scary underworld. It puts you in a brilliant buying position, so its win win whatever happens. The main thing I think is to get yours sold. You don't want to be hanging around for eternity, and as you say, the market is changing.

I can almost guarantee there's many people out there who didn't want to rent because of the cost, but now they've lost tens of thousands on valuation.

your buyer has already waited a long time. 

housebuyer143

lookstraightahead said:

Renting isn't a scary underworld. It puts you in a brilliant buying position, so its win win whatever happens. The main thing I think is to get yours sold. You don't want to be hanging around for eternity, and as you say, the market is changing.

I can almost guarantee there's many people out there who didn't want to rent because of the cost, but now they've lost tens of thousands on valuation.

your buyer has already waited a long time. 

Swings and roundabouts though. They didn't move and they lost money on the sale price but the one they are buying has reduced also, maybe by more 🤷‍♂️

lookstraightahead

housebuyer143 said:

lookstraightahead said:

Renting isn't a scary underworld. It puts you in a brilliant buying position, so its win win whatever happens. The main thing I think is to get yours sold. You don't want to be hanging around for eternity, and as you say, the market is changing.

I can almost guarantee there's many people out there who didn't want to rent because of the cost, but now they've lost tens of thousands on valuation.

your buyer has already waited a long time. 

Swings and roundabouts though. They didn't move and they lost money on the sale price but the one they are buying has reduced also, maybe by more 🤷‍♂️

Except they can't decide on one to buy anyway. Sometimes I feel people really don't want to move at all. They tread water for an eternity in order to find their dream home that isn't on the market anyway.
it's like the brothers Grimm 

niceguyed

We recently broke chain for the reasons you describe. You need to remember you can't have your cake and eat it. I'm assuming your buyer is only hanging around because they locked in a fantastic rate, although I'm wondering if they are doing the math on a higher rate versus lower price on another house. Your buyer has patience and it sounds like they overpaid if their offer was much higher than the next highest. Just be grateful they aren't renegotiating given market conditions. I'm surprised they've hung on this long.

If you want your premium price you're going to have to put something on the line. Your buyer has waited months and you've been able to use that as leverage on the houses you viewed/bid on. 

If you're willing to break chain and can live with the risk then worst case if your onward purchase falls through you have cash in the bank in a falling market. 

Also are you really that close to exchange? 

Ramouth

In you position I would definitely break the chain.  We did, and although moving twice sounds like a hassle, it actually made each move much easier because we had an overlap.  In our case, we had just had to give up on our onward purchase and prices were going crazy so it was a stressful time to be off the ladder, but this does not seem to be your situation so i would say it is a good plan.

mattyprice4004

Another vote for breaking the chain - if my seller had done that it'd have saved us all a lot of stress and money.

Parties03

niceguyed said:

We recently broke chain for the reasons you describe. You need to remember you can't have your cake and eat it. I'm assuming your buyer is only hanging around because they locked in a fantastic rate, although I'm wondering if they are doing the math on a higher rate versus lower price on another house. Your buyer has patience and it sounds like they overpaid if their offer was much higher than the next highest. Just be grateful they aren't renegotiating given market conditions. I'm surprised they've hung on this long.

If you want your premium price you're going to have to put something on the line. Your buyer has waited months and you've been able to use that as leverage on the houses you viewed/bid on. 

If you're willing to break chain and can live with the risk then worst case if your onward purchase falls through you have cash in the bank in a falling market. 

Also are you really that close to exchange? 

Exchanging on our house we are selling? Yes, my solicitor said that end of Jan is very doable for it, I think the rest of the chain are all ready to go also. 

Our buyers have been patient but they also did need to renew the mortgage offer and we footed the price difference for that; I think we were fair as we agreed to it at face value given the circumstances of what’s going on in the housing market atm. 

As for exchanging on the purchase, well, let’s see. Surveys this week and hopefully progress on searches next week. Definitely pushing the dates but we can only try to make it work.