If you have sold your property or are buying a property and have heard the phrase, what does that mean? In this article we look at “no chain meaning” so that you understand fully the position that you are in.
Put simply, no chain means that one person is buying a house from another person and there is no one else in the process.
This is a rare occasion, as usually there will be several people involved in a house buying chain.
Let’s take a look at a quite normal chain.
What Is A House Buying Chain?
Often there are three or four people in a chain.
A typical house chain might look like this:
At the bottom of the chain there might be a first time buyer, so they have no house to sell.
They are the first person in the chain.
They agree to buy a flat for £175,000 (Buyer 1).
The seller now has to buy somewhere to live in, so they are moving up the property ladder and are buying a semi detached house for £350,000 (Buyer 2).
The person selling that house is also moving up the property ladder and buying a large detached house with some land for £750,000 (Buyer 3).
The people they are buying that house from are downsizing and are buying a bungalow for £375,000 (Buyer 4).
The bungalow they are buying is empty, so that is the end of this property buying chain.
There are four people in this property chain, which means that there are four times more chances that the chain could breakdown, meaning all four house sales cannot proceed because they are all reliant on each other completing at the same time, to fund the next purchase in the chain.
What Can Go Wrong In A Property Chain?
There are so many things that can go wrong in one property transaction, so when you amplify this by four, the chances of the chain crashing at some point are increased.
Each property sale in the chain could fall through for a variety of reasons, including:
- One of the buyer’s loses their job so cannot afford to buy the house any longer
- A mortgage offer is withdrawn due to problems with the property discovered during the survey
- A storm, fire or flood damages one of the properties making it uninhabitable
- One of the buyer’s simply changes their mind and decides not to buy a property
If any of these things happen before exchange of contracts, there is absolutely nothing anyone can do it, because it is only at exchange of contracts that there is a legal obligation to complete the transaction.
Before then, anyone in the property chain can walk away with no questions asked.
No Chain Meaning
We hope that you can now see why buying a property with no chain can be a huge advantage, as the chances of it falling through are so much smaller.
It is not impossible that a no chain property transaction will fall through, but it is far less likely.
To ensure that your house sale or purchase proceeds as smoothly as possible, chain or no chain, speak with a specialist conveyancing solicitor today.