Collapsed Chain
Reasons why a Property Sale Chain Collapses
A collapsed chain of buyers and sellers can have a devastating impact on the buyer of a property. A collapsed chain can happen for a variety of reasons. For example, one buyer in the chain might have been gazumped by the seller prior to contracts being exchanged.
Gazundering can also cause a property chain to collapse. This is when a party to the contract, usually the buyer, wants a reduction in the price. This arises when the contract is being negotiated for the sale of the property
Most property transactions will have a buyer/seller chain. The chain will usually start with a first time buyer and links in the chain are formed as each seller is also a buyer. The property chain ends when the owner of one property is selling and does not have the purchase of another property lined up.
Other reasons for a collapsed chain include a buyer changing their mind about purchasing the property. Another reason could be if a survey completed on the property prior to the house sale reveals some sort of problem. Around 25 per cent of property chains collapse.
Tips To Avoid A Collapsed Chain
There are a few tips to avoid a collapsed chain. When selling a property, it is best to sell to a first time buyer. First time buyers are less likely to hold up a property sale, as they won’t need to sell their property before they can move in. Ideally, one should find a buyer who is able to move in as soon as possible and who can afford to purchase the property.
There is also the option of selling the property and then staying with friends or relatives for a period. Once the sale proceeds come through, the potential buyer can then look for a new house.
