Breaking the chain?

May 23, 2022 7:31 AM

Question for those who have sold a property then moved into another. How have you managed it? Is there any way to close on the sale and purchase simultaneously, and is this a common thing? Is the best option to rent for the period in between selling one place and buying another (I believe this is called 'breaking the chain')? How do other people manage this process? How can I make this process as simple as possible? (UK-filter)

I'm starting to think about moving house. I currently own an apartment which I'd need to sell in order to buy a new one. Ideally, I would be able to close on both processes on the same day so I could move from my old place straight to my new one.

In my preliminary chats with estate agents many have urged me to 'break the chain' by completing the sale of my flat, moving into rented accommodation or in with a friend, and going on to buy a place. According to them this would put me into a strong position as a chain-free buyer. I feel like this could be really risky if my purchase fell through and I ended up having to continue paying rent for months. I do not know anyone who has completed a sale and purchase simultaneously; most people I know in that position moved in with family for the interim period.

But I do not have family or friends I can stay with. Partly because of location issues, and partly because none of them have loads of space and I would hate to be in the way.

This seems like such a common thing that people must deal with all the time, but I haven't found many resources about this. Most advice is just to stay with family or stay with friends. What if that's not an option?? The advice on this page doesn't feel that helpful to me. In particular I do not want to extend my mortgage or take out a costly new loan.

I feel like the simplest thing would be to complete on both sale and purchase simultaneously so that I can move all in one go from Old Home to New Home. But I don't know anyone who has done this and I don't know how likely this is to happen. What can I do to achieve this? I do intend to keep my chain as short as possible by seeking out places that are for sale chain-free only, and only accept offers from buyers who are not in a chain.

posted by unicorn chaser to Home & Garden (13 answers total)

Especially in a fast moving market it helps a buyer to be ready to go - pre-qualified/cash, no chain etc. So if you can be that person it will make your offer more attractive. Will it help you get a place when others outbid you a lot, probably not. But it may help if the difference is small.

The way people deal with this is to complete their sale, put their stuff into storage (which is not normally very expensive), rent a room or studio somewhere on a monthly basis and push hard and dedicate themselves fully to finding that new property and completing.

Given current cost of living increases and the increased interest rates that'll bring I'd expect demand for properties to go down somewhat as well, at least in some locations. So locking in your selling price by completing could be beneficial, even if you have to pay rent for a bit until you find and complete on your new home.
posted by koahiatamadl at 7:56 AM on May 23, 2022

I'm dealing with the same issue and got some clarity by talking to someone at the mortgage company. I'm in the US, so I'm just suggesting that as someone to talk to, since what I was told may not apply to you at all. I'm going to have to rent for a while before buying a new place, but I know people who've sold on contingency. I agree that it's common in the US, but the current crazy housing market makes it much harder here since sellers don't want to have to count on your sale going through.
posted by FencingGal at 8:01 AM on May 23, 2022

It happens all the time, the reason there's not much written about it is because it is so common. Your solicitors will be completely familiar with the concept. But like everything property related, it's a pain in the arse, everything that can go wrong probably will go wrong, and it's highly likely you will be panicking on the day of completion when either your transaction and/or any other transaction in the chain appears on the verge of collapsing. However in the vast majority of cases it all works out in the end and you sit in your new home vowing NEVER to move ever again.

As you note, the alternative of moving to rented accommodation or staying with friends and family is a viable alternative, but also risky and potentially expensive. So there's no easy answer. My best advice is to find a solicitor you trust and/or micro-manage them throughout. good luck.
posted by el_presidente at 8:09 AM on May 23, 2022 [1 favorite]

I feel like this could be really risky if my purchase fell through and I ended up having to continue paying rent for months.

It's all risky. If you do break the chain, you could potentially do better on both transactions to an extent that would cover a few months of rent and then some.

So really it's about deciding which risk you'd rather take. In your shoes I'd start by asking around several local estate agents and take their advice if there's a clear consensus, because they'd likely have their finger on the market pulse to a greater extent than me.
posted by flabdablet at 8:33 AM on May 23, 2022

I do not know anyone who has completed a sale and purchase simultaneously; most people I know in that position moved in with family for the interim period.

I'm in England* as I assume you are, and most people I know who've moved house after their first purchase were in chains, and several did have things go wrong in a different part of the chain and have had to abandon completion dates at short notice. I think changing dates is more common that the chain collapsing. But it's definitely normal for a chain to be up to about 5 properties.

I suspect, in terms of pure monetary value, you'd come out ahead if you sold first then got a private let for 6 or 12 months and started your purchase process from there, just because of how much of an advantage on the market that would give you, but it'd be a stressful year.

*& Wales, for the purposes of this jurisdiction. I've never bought a house, but at least I'm in touch with housing norms in this market.
posted by ambrosen at 8:48 AM on May 23, 2022 [2 favorites]

edit: just realized you're in europe, this might not be true at all (canadian!), but I'll leave it so as to not abuse the edit window too much:

We have sold multiple houses and bought new ones at the same time - mortgage wise there's something called "bridge financing" that you pay for to cover the amount of time where you still own your old house but have also bought your new house. It costs a decent amount of money, but it works great.

We have always done this by getting our current house ready to sell and listed, and putting the possession date 3 months in the future. Once our house has been listed and people have started to come to see it, we also start looking at houses to buy.

you can make an offer on a house that hinges on whether or not you sell your old house - this is called a "conditional sale" if it's accepted, and then you try to sell your house in the allotted time (usually 30 days) or else your purchase falls through.

The 3 month possession cushion is nice because it can be negotiated if you find another place to buy - sometimes your buyers will want to push it up, and if you have somewhere to go, you can. I have always tried to have the buyers' possession date of my old house be at least a week after I have gotten posession of the new house, so as to not make moving insanely stressful.

anyways. a realtor/mortgage professional can help you with all this and the paperwork, but it's super common!
posted by euphoria066 at 8:50 AM on May 23, 2022

I am in the UK. Things in the chain can either happen simultaneously or one or more people break the chain.

If you want to do things simultaneously, then you all arrange with your respective solicitors that you will exchange contracts on day X and complete on day Y. Day X comes and you all exchange and are locked into the purchases with your deposits. Then day Y comes, and you all complete in the chain, with money passing up from the FTB to the end of the chain. This can and will work as long as the chain is short enough to physically complete on the day within banking hours (the money transfers are not instantaneous).

The main times it doesn't work as well is if:
(1) you are in a hot market and you are losing out on homes to chainfree buyers. Generally speaking adding some £ to your offers will solve this problem - people like a chainfree buyer all things being equal but they tend to like money more
(2) one of the purchases in the chain gets held up for one reason or another. This is pretty common, about 1 in 3 chains breaks down somewhere. But usually you can find another buyer or another property, or put pressure on someone to 'break the chain'. That someone does not have to be you.

On my most recent purchase, I was intending to sell and buy simultaneously, with the added complication that I was selling as a sole owner and buying jointly with my partner. In the end, complications with our purchase meant that it was easier for me to exchange & complete on my sale about a month before we bought the other property. I moved into my partner's flat and put my things into storage, but I was very confident that the people I was buying from were motivated to finish the purchase.

Among my friends and family, it's been more common for people to have a short chain that exchanges and completes simultaneously. While there has at times been lots of angst about surveys and searches and so on, the mechanics of completion day itself have always been completely fine.
posted by plonkee at 9:25 AM on May 23, 2022 [2 favorites]

What I think does make sense, is putting your flat on the market and accepting an offer on it before making an offer on somewhere you want to buy. I wouldn't accept an offer from anyone whose current property was still actively for sale.
posted by plonkee at 9:29 AM on May 23, 2022

Also in UK.

We moved over New Year and (without going into gory details about our nightmare buyer) ended up renting our old house off the new buyer for a month while work was done on the new house. Certainly there was a chain of about six properties in total, with our awkward buyer at the bottom of it, and everyone was lined up to complete on the same day. It didn't go well, because of the nightmare buyer.

If we were to move again (we will) I would make sure we were either buying an empty house and / or able to vacate ours days before we needed to because no one needs that level of stress ever. So I would be firmly in the no-chain-where-possible camp.
posted by Martha My Dear Prudence at 9:36 AM on May 23, 2022

As others point out, completing sale and purchase simultaneously is so completely normal and unremarkable that it often doesn't even get mentioned. If it sounds mad that's mostly just because the entire process of buying and selling in the UK is always a ridiculous high-stakes plate-spinning exercise no matter how you do it. I have done it both ways more than once and it's always a nightmare, chain or no-chain.

For example: we moved house last year (N. England), and it involved 'breaking the chain'. The house we intended to buy was a newbuild, and was not due to be completed for a couple of months after our buyer wanted to complete. In order to secure the sale we agreed to sell without tying it into our purchase, moving into short term accommodation to cover the gap. This turned out to be a mistake.

The developer of the house we wanted was a complete cowboy, and to cut a very long story short the purchase fell through and our planned two months in temporary accommodation turned into over seven months, several of which were spent living with relatives in less than ideal circumstances. The local rental market was utterly saturated and properties were being let sight-unseen with 12 months' rent paid upfront so we couldn't find anywhere to tide us over. Properties for sale that would suit our family were thin on the ground, and were being snapped up very fast. It took us months of searching and two more full blown purchase attempts (with legal and survey fees etc) to secure a place.

One benefit to our position was that being chain-free we were very desirable buyers - there were two other offers as good as or better than ours on the place we finally completed on, and we only made it because we could prove that we could move very fast (much faster than the sellers, as it turned out). But there really aren't all that many cash buyers out there, so not being in this position isn't as big a disadvantage as you might think, and the costs of temporary accommodation, storage, etc are not insignificant so could easily wipe out any gain you might make there. Many of the stresses of simultaneous sale/purchase can be mitigated by hiring good removals people, and chasing to make sure that your solicitor does their damn job in a timely manner.

Breaking the chain can be done, and it might work for you if you're able to deal with the numerous downsides, but in my experience it is just as likely to go wrong as completing as part of a chain in the usual way.
posted by tomsk at 9:58 AM on May 23, 2022

Yes, the main thing to understand about buying and selling property in England and Wales is that there is literally nothing you can do to guarantee it runs smoothly. You just do your best with the hand you have been dealt and make very careful mental calculations as to whether the latest issue is a small hiccup in the great scheme of things or liable to make the whole thing fall down.

My timeline last time was put old house on market in September, accept offer within a fortnight, put offer on new house within fortnight, have buyer on old house pull out after survey, fix problem in survey and put old house back on market, accept offer on old house in December, discover new house vendors needed to arrange power of attorney, resolve issue with rights of way on old house, exchange on old house in early April, complete on old house two weeks later, exchange on new house in early May, complete on new house two weeks later. Live happily ever after. I kept a half an eye on the property market until I exchanged on the new house.
posted by plonkee at 10:35 AM on May 23, 2022

In the UK, currently in the middle of this delightful process. This is my third purchase, second sale, first time doing it simultaneously.

Yes, it's perfectly normal to complete on the same day as your buyer and/or seller as part of a chain and you can do this without going anywhere in between. This, in my experience, is what people expect to do and what conveyancers will expect to happen. They know how to handle the cascading dance of exchange deposits and mortgage drawdowns and redemptions. Yes, this might go wrong right up until the point you all exchange contracts.

Whether sellers will accept your offer as a buyer in a chain depends a lot on where you are, what the local market is like, how long your chain is, whether Mercury is in retrograde, etc, but in my experience no one will take you seriously as a buyer unless you have at least got a buyer lined up and things are underway with the sale of your property. Your seller's estate agent will want to talk to your estate agent to confirm this.

My chain is a very short and loose one in that my buyer is moving from rented accommodation with a flexible timescale, I am willing/able to move before completing on my purchase, and my seller is willing/able to move before completing on their purchase, but no one actually wants to do an intermediate move and everyone has made it clear we would prefer it if we can all line up. But we can all break the chain if needs must which does remove some of the time pressure but I'm still having daily anxiety attacks over it so, yeah. Fun times.
posted by corvine at 12:51 PM on May 23, 2022

I know you said you don’t want a loan, but just because I haven’t seen the term spelled out here, a bridging loan is what some people take out to enable them to buy a property before they’ve sold their current one. (I haven’t used one so this is the extent of my knowledge!)
posted by fabius at 5:12 AM on May 24, 2022