What does 'Broken Chain' mean when buying a property?

Find out what Broken Chain means when you are buying a property. 'What does Broken Chain mean?' plus over 150 other property related terms and jargon in plain English

Broken Chain

If you're buying a property these are probably the last two words you want to hear.

A chain (sometimes called a "Property Chain") means a set of property transactions that are all interlinked. None of the transactions can actually happen without all the others happening as well.

Simple Broken Chain Example

Let's say you are buying a flat from Ms A who is upsizing and buying a house from Mr B. Mr B. is moving abroad for work and so will be moving into a rented apartment.

Ms A won't finalize the sale of her flat to you until Mr B finalizes the sale of his house to her.

The two properties are the chain - you are at the bottom of the chain, Mr B is at the top. This is a fairly simple chain of 2 properties, the longest one I have seen involved 11 transactions!

You, Ms A and Mr B are all capable of "breaking the chain" by changing your minds and deciding not to buy or sell.

Let's say Ms A finds out that she will probably be demoted at work and will be getting a pay cut. She's not sure she can now afford Mr B's house so she decides not to move. In property lingo we say she "pulled out" of the purchase of Mr B's house and "pulled out" of the sale to you.

A bit more lingo - we say both transactions have "fallen through".

Extended Broken Chain Example

Let's take the same example above but Mr B isn't moving into rented accommodation, he's buying from Mr C who is selling an empty property he owns. So Mr C is now the top of the chain.

When Ms A "pulls out" she has "broken the chain" but parts of the chain still exist. Ms A is out of the picture but Mr B still wants to buy from Mr C.

As an agent we would want to "repair the chain" as soon as possible by finding Mr B a new buyer.

Let's say we do find Mr B a new buyer, Ms F who is selling her property to Ms E who is selling her property to a first time buyer.

So now we have a repaired chain containing 3 properties. You might want to get a pen and paper to sketch that out! Its exactly what I do when chains are complex.

Managing Property Chains

A good estate agent will manage chains the best they can by "Deal Chasing" all the transactions even if some or most of them are not taking place via their agency. "Chasing" simply means calling all the parties involved to identify possible delays (such as a solicitor not returning calls, local searches being delayed, etc.) and finding ways to resolve them because ... Time Costs Deals.

If you want to know how best to handle situations when you end up in a property chain pick up a copy of my ebook How to Really Buy a Property.

Search Results for 'chain' in
How to Really Buy a Property

"... you should have to hand; Why agents ask questions that could cause you offence; The terminology used by agents; The difference between chain Free and Vacant Possession; Why you can't get a mortgage on some properties; The characteristics of a leasehold property; What lease lengths..."
"... when they speak to you, in other words they generally assume you know them. The most frequently used are: First Time Buyer chain Free and Vacant Possession Tenanted Cash Purchasers Only Repossession Leasehold Share of Freehold Freehold - First Time Buyer - Originally this..."
"... cost of renting is often outweighed by the lower offers that are accepted by vendors from First Time Buyers. Such buyers are also sometimes referred to as chain free (see below) - chain Free and Vacant Possession - The two terms are often mixed up but they can mean very different..."
"... that are accepted by vendors from First Time Buyers. Such buyers are also sometimes referred to as chain free (see below) - chain Free and Vacant Possession - The two terms are often mixed up but they can mean very different things: chain Free Buyer: A buyer who does not need to sell..."
"... and Vacant Possession - The two terms are often mixed up but they can mean very different things: chain Free Buyer: A buyer who does not need to sell anything in order to buy (see above) chain Free Property: A vendor who will sell his property and move out as soon as the solicitors sort..."
"... Free Property: A vendor who will sell his property and move out as soon as the solicitors sort out the paperwork and the buyer has the funds in place. This is different from the chain situation where a vendor accepts an offer subject to him finding a place to buy. chain Free Properties are extremely attractive as any purchase should only involve five parties - you, the vendor, the lender and the two solicitors. The fewer people involved and the shorter the timescales, the more likely it is that everything will happen..."
"... it is that everything will happen successfully Vacant Possession: This is often confused with chain free properties. Just because a property is empty it does not necessarily follow that it is being offered chain free so always double check. - Tenanted - It is possible to buy a..."

"... aware that it is not always the highest bid that gets the property. One party may offer £302,000 but they themselves might be in a chain. If another party offered £298,000 and was chain free the vendor may go for what they see as the 'safer' option even though they will loose a potential..."

"... time. The chain moved forwards and the vendors of Edgeley Road booked a survey on their house in Balham. The surveyor's report suggested the house needed a great deal of work and, with so many extra costs to take into account, they decided to withdraw from their purchase of the house. On a..."

Chapter 19: Time Costs Deals
"... covered in this chapter Why you should push your purchase through quickly; Why buyers stop buying and sellers stop selling; Why chains often fail; The true story of how a buyer lost a property by waiting too long; There should be no real need for all the tricks and short cuts..."
"... Prices Falling House Prices Rising Loosing their buyer Loosing the Property they want to buy Any part of the chain below collapses Any part of the chain above collapses Another buyer makes an offer Fire or flood at the..."
"... Rising Loosing their buyer Loosing the Property they want to buy Any part of the chain below collapses Any part of the chain above collapses Another buyer makes an offer Fire or flood at the property Redundancy Splitting up..."
"... with all the potential those documents have to ruin the deal! If you are in a chain involving say four properties, the chances of some disaster befalling the transaction over six months is more than 100%! Don't let it happen. True Story - The Windows at Seymour Street Sonya and Mark had..."

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