ESPC Jargon Buster: Chains
In our Jargon Buster series, we break down the terminology of the property industry to help you feel confident and in control of your home-buying journey.
You can read the previous Jargon Buster features here.
In this article, we’re discussing the term ‘Chain’, and what it means when buying or selling a property in Scotland.
What is a property chain?
A chain is the term used to describe the group of buyers and sellers linked by their property sales - each person is linked to the next by the property they are either buying or selling.
The chain usually begins with a first-time buyer or someone who does not have a property to sell, and ends with a person who is only selling their property, not purchasing another.
Everybody in between these parties is reliant on those above and below them in the chain to ensure all transactions proceed smoothly.
How many people can be in a chain?
It depends - there are no hard and fast rules on how many home buyers and sellers can be in any one property chain.
It can be as little as two parties, for instance if a first-time buyer with nothing to sell is purchasing a property owned by a buy-to-let investor, who is not purchasing another property in its place.
Sometimes, it can be in the region of six-eight parties, with each party linked to another until the 'top' of the chain is reached, where a person is only selling their property, not purchasing another.
How does the chain work?
When you're in a property chain, each party's solicitors will be working on their own purchase and sale transactions, with several people working to ensure that each transaction is aligned.
All parties will need to agree to a completion date, when all of the transactions will become final and legally binding, and everybody can move house.
What does chain-free mean?
If you see 'chain-free' or 'no upward chain' on a property listing, this means that there will be no other parties involved in the chain - it will just be you and the seller, and your buyer if you are selling a property.
This is most commonly the case if the seller is purchasing a new-build property directly from the developer, or if the property is a former buy-to-let that the owner is selling.
A chain-free purchase is usually the quickest and easiest type of transaction, with limited parties involved, meaning there are fewer potential hurdles for solicitors to navigate.
How long does a sale take in a chain?
There are no hard and fast rules for how long a property sale that's part of a chain can take - it all depends on how many links there are in the chain, and how efficient every party's solicitor estate agent is.
Property sales in Scotland usually take on average six-eight weeks to complete, but if there are multiple links in the chain, this could take longer. It's important to keep communication open with your solicitor estate agent to establish a timeline that suits all parties.
Why do chains collapse?
Property chains can sometimes fall apart prior to the transactions completing, although this is rare in Scotland thanks to missives being concluded early in the process. However, with multiple parties involved and lots of details involved, sometimes things can go wrong and property chains can collapse.
If a property chain collapses, this may delay your sale, as one of the links may need to find a new property to purchase, or pull out of the chain altogether. Although sometimes this cannot be avoided, the risks are reduced by using a reputable, experienced solicitor estate agent and by being as prompt, organised and efficient as you can - sign and send all paperwork when requested, follow your solicitor estate agent's advice and get your finances in place early.
Find out more
If you’re interested in finding out more about buying a home, contact ESPC Mortgages for help and advice.
Find a solicitor estate agent in Edinburgh, the Lothians, Fife and the Borders with our handy search tool.
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