What is everyone’s experience on breaking the chain?

JC0733

We are currently selling our first house and buying a bigger house due to family expanded. 

Our buyers are FTBs and the property we are buying has no onward chain as the vendors are separating and going into rentals (we believe one of them have already moved out so just the lady with their 2 grown-up kids).

The sale on our property is ready now but we are still waiting for another 5 enquiries to be answered on the property we are purchasing (at least 3 of these are just our solicitors asking for indemnity policies to be paid due to them not able to provide paperwork for some
work the previous owners have done, at least 10 years ago) and we don’t know if the vendor has found a rental yet. Or even if she has, we are guessing she wouldn’t be able to move into it straight away so it could potentially be another month or 2 yet and we really really want to complete in April as our current mortgage finishes at the end of April, we really don’t want to pay another £999 of product fees to remortgage to go on tracker rate for the sake of a of couple of months, or shorter. 

So we are thinking of just breaking the chain and let the sale of our property complete. The house we are buying need some work done, only cosmetic stuff so we were going to move in with my parents whilst we decorate etc. anyway. Although it’s not ideal living with my parents with 2 little kids but I think we would rather do that than paying another £1000 for nothing, but then there’s always a risk of our purchase falls through for whatever reason then we will be stuck with my parents for longer whilst we look for another property so we are really baffled with what we should do! 

Obviously the ideal situation would be, we are able to complete our sale/purchase at the same or at least, exchange on our purchase whilst we are completing. 

What is everyone’s experience with breaking the chain? Is it worth it? If we do, would our solicitor hold onto the money for  the deposit of our purchase and their fees etc? Or do we get the money first then pay them when we complete? 

Hoenir

Stall your own sale as much as possible without putting it into jeopardy. 

Be prepared for the property you are purchasing to be a far from smooth ride. 

Keep your eyes open as to what else comes onto the market. 

housebuyer143

I wouldn't suggest it. My mate did just this and her purchase fell through and then she couldn't find a suitable property while living in her dad's house. 
You have kids and how accommodating will she be if you are there for a long time? 
She was there 8 months before she bought something and she regrets selling the first one without a better one lined up.

silvercar

How about exchanging with a long completion? That would keep your buyers happy and give you some time.

JC0733

silvercar said:

How about exchanging with a long completion? That would keep your buyers happy and give you some time.

We could but that means we have to pay £999 to go on tracker to avoid ERC; or I guess we could just not pay anything and go onto Standard mortgage rate - variable. The difference is about £400 a month between tracker rate and variable rate but hopefully we would only have to do this for a month.

nicmyles

We did this because our purchase was taking forever, our buyer was getting itchy feet and we weren't confident of finding another easily due to some issues with the flat we were selling.

We were planning to live with family for four weeks while the last bits were sorted on the purchase. We were there four months. But we did end up buying the house we'd planned to, and in the long run it was the right thing to do. It was stressful and a real pain at the time though. You just have to be very confident in the temporary accommodation you have in mind and comfortable that it might be indefinite.

Issues included all our stuff being in storage and hard to access (it's all packed tight in a container, you can't easily extract items), which included all our warmer clothes given we'd planned to be in the new place over the summer, and it stretched into late autumn.

But I don't think it's a complete no-no, I don't regret doing it.

eddddy

silvercar said:

How about exchanging with a long completion? That would keep your buyers happy and give you some time.

The OP mentions that their solicitor is waiting for replies to 5 enquiries. Unless the enquiries are 'optional', the OP might not be able to exchange contracts until those enquiries are replied to satisfactorily.



Plus, I imagine the OP's sellers will want to exchange of contracts with the OP and sign their ASTs on the same day.

So I imagine the OP's sellers plan might be as follows...

• Wait until the OP (and the FTB) confirms they are ready to exchange

• Find 2 rental properties and pay holding deposits

• Wait until they have passed the Landlords' referencing (e.g. contacting employers etc)

• When the 2 landlords are ready - sign their new ASTs on the same day as exchanging contracts with the OP

Because...

• If the sellers sign ASTs before exchanging contracts with the OP - the sale might fall through, and so the sellers are left paying a mortgage plus 2 lots of rent

• If the sellers exchange contracts with the OP before signing ASTs - one or both sellers may be unable to find somewhere to rent, and end up homeless.

(Unless the OP's sellers can negotiate some kind of 'special conditional arrangement' with their future landlords to do the referencing, and put a hold the rental properties for an extended period.) 

pretamang

we did this and had 2 young children at the time, we just couldn't make the timings work so sold our house and moved before our purchase was ready. We moved into rented for 3 months (had to take a 6 month minimum term but they re-let after we moved out so only paid for 4).

Really worked for us as we moving to a new area and the purchase took even longer than expected. Took a lot of the stress out the process in trying to align timings.

eddddy

pretamang said:

we did this and had 2 young children at the time, we just couldn't make the timings work so sold our house and moved before our purchase was ready. We moved into rented for 3 months (had to take a 6 month minimum term but they re-let after we moved out so only paid for 4).

Really worked for us as we moving to a new area and the purchase took even longer than expected. Took a lot of the stress out the process in trying to align timings.

Out of interest - how did you deal with aligning the exchange of contracts for your sale with signing an AST?

1. Did you exchange contracts and sign the AST on the same day?
2. Did you exchange contracts first, and sign the AST later? (And risk not having anywhere to live after the sale)
3. Did you sign the AST first, and exchange contracts later? (And risk the sale falling through, and you still having to pay rent)

To be honest, I think a number of people take option 2, and just accept the risk.

Herzlos

JC0733 said:

silvercar said:

How about exchanging with a long completion? That would keep your buyers happy and give you some time.

We could but that means we have to pay £999 to go on tracker to avoid ERC; or I guess we could just not pay anything and go onto Standard mortgage rate - variable. The difference is about £400 a month between tracker rate and variable rate but hopefully we would only have to do this for a month.

If you remortgage to a portable product, then there won't be any ERC when porting it to the new property, assuming you stay with the same lender.

annetheman

Breaking the chain is almost always the best idea. 

Considering your worst case scenarios, you could end up staying with the family for longer than you anticipated if the onward purchase falls through. Of course if it falls through and you stay in the house having paid the £999, you will also potentially be staying for longer than you anticipated on a tracker. 

Whichever living situation (rather than the cost of it) is more tolerable in the medium term in each of those scenarios would be the deciding factor for me. If I had a family - kids etc - I would stay and pay the £999, but alone or just with partner, I would probably move in with family. 

I'm in a similar but not quite the same dilemma - I could break the chain and move in with dad and living with him for potentially months on end while looking for onward home versus staying in my current home. The choice for me is  complicated by the fact he has a Compulsory Purchase Order and also looking to move (gentrification). If my dad wasn't moving, I might in fact move in with him - but wouldn't if I wasn't single without kids.