What does 'Property Chain' mean when buying a property?
Find out what Property Chain means when you are buying a property. 'What does Property Chain mean?' plus over 150 other property related terms and jargon in plain English
Where more than two properties are involved in a transaction (Mr A wants to buy property X but needs to sell his own place first) there is a chain. The property at the bottom of the chain is the person who needs to sell before any other transactions can happen. The top of the chain is the person who can move out without finding a property to buy.
As an example - Mr B owns property X. When he sells it he will move out and rent somewhere else. Mr A wants to buy property X but needs to sell Property Y first. Mr C offers to buy Property Y. Mr C and Property Y are known as 'the bottom of the chain'. Mr B and Property X are 'the top of the chain'.
The moment the transactions becomes legally binding and a date for people to move is set (known as Exchange of Contracts) has to be organized so all the transactions exchange simultaneously.
Obviously the more properties there are in the chain the more likely something is to go wrong but even agreeing a final completion date can take time as all parties have to be in agreement.
The longer the chain the more likely it is to break because Time Costs Deals - its just more likely something is going to happen in someone's life that will make them decide they no longer wish to buy or sell (or both).
To find out more about Property Chains and how to handle them when you are buying pick up a copy of my ebook How to Really Buy a Property.