The majority of homeowners or buyers in the UK will be familiar with the expression ‘property chain’ i.e. when a sequence of houses is being bought and sold. These houses are said to be linked together in a process.
Unfortunately, this also means that if even one of those property sales in the chain falls through, it can threaten all the other further potential house purchases and sales in the sequence. This is what those in the property industry mean when they talk about a chain breaking.
A property chain breaking can cause utter desperation amongst those caught up in it. People will have planned their lives according to a move in to their new home and probably made other important decisions based around it too. Not only that, but there could also be quite a bit of additional expense involved in a chain break. That’s because unless a buyer can quickly be found to take the place of the buyer whose purchase fell through, then the chain could collapse and every homeowner in the mix ends up back at square one. In other words, they would be faced with re-marketing their property, and forking out more cash for further solicitor and conveyancing fees.
How to get a BMV property when a chain breaks
As a property investor though, it’s possible to step in and bag yourself a Below Market Valuation (BMV) property, while also saving the chain from breaking. First though, you need to know when a chain is in trouble, and who to contact to make the offer to save it. The easiest way to find this out is to know the professionals involved in the chain – 9 times out of 10 that’s the estate agent tasked with selling one of the properties.
However, he or she is not going to tip you off unless you cultivate a relationship with them. This can take a number of months. So, if you fancy this strategy, get started with a few local estate agents now!
Once your friendly estate agent tips you off, the plan is to then approach the other sellers in the chain and offer to buy the ‘rogue’ property i.e. the one where the deal has fallen through. You say you will do this only on the condition that each seller cuts their selling price by a certain amount, e.g. £5,000 or £10,000.
The stress of not selling, and as we mentioned earlier, facing further months of stagnant misery and additional financial stress, can often make other sellers readily agree to a deal like this. And, if all four sellers in a chain agree, then you have bagged yourself a property with a £20,000 price cut. That is provided the property you purchased was the one at the bottom of the chain. Most estate agents will tell you that it is indeed the first-time buyer property that is the one sale most likely to fall through.
This is the type of situation that could be considered a ‘win-win’ for everyone – those involved in the chain and yourself as the property investor who has bagged an impressive BMV deal!
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