In the current UK housing market, approximately 1 in 3 of sales fall through. This can occur for several reasons including buyers or sellers having a change of heart, problems at survey or lenders pulling their mortgage offers.
If you add to these problems the erroneous practices that are common when selling a house – like gazumping and gazundering – you can begin to understand how fraught with issues the process can be.
Although there are exceptions (such as cash sales), most buyers’ ability to purchase a property depends on them finding a buyer for their own house.
This pattern means that most houses on the market will end up as part of a chain where the security of the sale can be dependent on external factors.
As a result, even when negotiations have gone smoothly at offer stage and a sale has been agreed in principle, a problem with one participant (buyer or seller) in the chain can lead to the whole transaction collapsing.
So, if you’re unfortunate enough to be involved in a broken chain, what can you do?
Step 1 – Communication
Generally speaking, good communication between all parties involved is key.
If buyers and sellers are upfront about their situations, willing to be flexible and explore different options, problems arising from a broken link in the chain can be overcome.
The first and most obvious step is to negotiate with the seller to see if they would be willing to wait for your own sale to complete.
Unfortunately, in many cases, the vendors will not accept unforeseen delays but occasionally they may be flexible.
Step 2 – Financing Options
Assuming the vendor does go back to the market to look for another buyer, the next step for you is to check with your broker if the mortgage that they offered is still available for another property.
Then you can start searching again with the added advantage of having your finance approved.
If, however, you have committed to that one special dream property but have not sold your house in time to complete, you could look into a bridging loan. This is a short-term loan, which can be arranged in just 24 hours, to cover the interval between buying the property and selling your current one.
Remember that bridging finance can be expensive and penalties for extending the term can be severe, so tread carefully when exploring this option.
Step 3 – Look for a Cash Buyer or Quick Sale Company
Another avenue worth exploring is to use a quick buying firm to sell your property fast, allowing you to purchase the new one.
Fast cash sales can be completed in just seven days, with a guaranteed cash offer and certainty of sale, although you will typically receive a better price selling on the open market. Most will cover your legal fees and you won’t have to incur estate agency costs
Alternatively, you could try an express agency sale. This is where the house is put on the open market using a ‘realistic pricing model’ to generate offers quickly. This contrasts with traditional estate agents who tend to overprice properties, often leading to a lack of serious offers.
Furthermore, some express agencies require buyers to pay a non-refundable reservation fee upon acceptance of their offer, committing them financially to the sale and making it less likely they will drop out.
Remember, regardless of what side of the chain break you’re on, all is not lost and there is usually a workable solution.
Property Solvers is a hybrid estate agency which provides both fast cash sale and express agency services that charge a non-refundable buyer’s deposit to prevent chain breaks.