Buying and Selling in a Chain

There are a number of implications if you are intending to tie in your sale and your purchase - especially if you intend to move out of your existing property and into your new property on the same day.

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Emma Crocker
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Setting the Completion Date: Exchange of Contracts

The Completion Date is not set until we exchange contracts. Any moving dates discussed before then are purely tentative and you should not rely on them for the purpose of booking removals or making any other arrangements that depend on a definite moving date.

We cannot exchange contracts on your purchase until we have satisfactory replies to all our searches and other enquiries. We also need to make sure that all necessary conditions and any legal requirements imposed by your lender have been satisfied, and a completion date has been agreed with your seller.

Similarly, we cannot exchange contracts on your sale until your buyer’s solicitors are satisfied with their own enquiries and searches, and that their own mortgage requirements are complied with, and we have agreed a completion date with them.

When you are a party in a chain of transactions, we’re unable to exchange contracts until all the other buyers and sellers have finished their enquiries and areready to exchange contracts also. All parties in that chain must then be able to agree on the same completion date.

Communication and Delay

The longer the chain the more difficult it is likely to be to achieve an early exchange of contracts and to agree a completion date. If just one party in the chain experiences a delay, it delays the whole chain. The difficulty for us is that we are only dealing with your own buyer's solicitor and own seller's solicitor and have to rely on them to pass on relevant information.

At Brethertons we are accredited under the Law Society's Conveyancing Quality Scheme (CQS). Among other things this means we subscribe to a Protocol which is designed to ensure that relevant information is passed to other parties in the conveyancing process (only where you agree to this). Where the other solicitors we are dealing with are also CQS accredited, the communication of information is greatly improved.

Breaking the chain

Where there is a relatively long chain and there is likely to be a delay on one of the sales, one solution is for somebody to agree to move out of their existing house first and go into temporary accommodation until they can move into their new house.

If you are minded to break the chain in that way, we recommend that we at least exchange contracts simultaneously on your sale and purchase in order to reduce the risk that something unforeseen happens on the purchase and the seller delays further or even pulls out altogether. This means you will have a set date to move our from your sale property – and into your alternative temporary accommodation – and already know the later date you will be moving into your purchase property. It is not always possible to have exchanged on both the sale and purchase but it is preferred to offer you some certainty and reassurance. If it is not possible, it leaves you moving out of your sale property, not know when or if you will be moving into your purchase property.

Bridging loans

If there is pressure to complete a purchase but the dependent sale is delayed, sometimes someone will suggest that you get a bridging loan so that you can buy the new house first, and pay off the loan when you complete the sale. Bridging loans are extremely expensive and banks can be reluctant to lend. In most circumstances we would strongly advise against taking a bridging loan. Certainly you should not enter into a commitment of this nature unless you have already exchanged contracts and have a fixed completion date for your sale, so that you definitely know how long the loan will run and what its final cost will be.

Completion day

Where you are tying in your sale and your purchase, we will need the money to complete your sale to be transferred to us from your buyer’s solicitor on the day of completion before we can send the money to complete your purchase to your seller’s solicitor. Even though in practice you are making one move, your sale and purchase are two separate legal transactions. If the buyer’s solicitor in turn is relying on funds from their own sale, they will be in a similar position. The longer the chain, the greater the risk of delay.

Generally the solicitors, mortgage lenders and banks are conscious of the need to transfer funds relating to house purchases quickly. Unfortunately there are occasions when transfer of funds to us is delayed for reasons beyond our control.

In our experience this is more likely to happen on days when there is a large volume of transactions for the banks to handle, such as Fridays, the last working day of the month, or the working day before a bank holiday so we would recommend you avoid fixing completion for any of those days if you can possibly do so.

Some lenders will also stipulate that they must have a certain number of days’ notice between exchange of contracts and completion, we therefore generally recommend allowing at least 7 working days between exchange of contracts and completion if possible.

Penalties for Late Completion

If the money is not received in the seller’s solicitor’s bank account until after 1pm, it is treated as being received on the following working day.

If we fail to get the purchase money to the seller’s solicitor’s bank account until after the completion date, then interest is payable at a very high rate. In practice, instances of failure to complete on the legal completion date are very rare, though the risk of it happening is greater the longer the chain.

Until the seller’s solicitor receives the purchase money from their buyer’s solicitor they are entitled to refuse to let the buyer have the key to move in. So if the money cannot be transferred until the following day, the buyer will incur overnight accommodation and storage costs, as well as the interest penalty.

Failure to complete at all

It is unusual that a sale and purchase fail to complete until after the date legally fixed for completion. It is extremely rare for the transaction never to complete if contracts have been exchanged.

Once a buyer has failed to complete their purchase on time, then provided that the seller was ready, willing and able to complete on time, the seller’s solicitor is able to serve a formal notice stating that a breach of the contract has occurred and require the buyer to complete within a further period (usually 10 days) by payment of the purchase price and the relevant interest.

If the buyer should then fail to complete in that further period, the seller is entitled to keep the deposit that the buyer paid on exchange of contracts and put the house back on the market. They can also claim for wasted legal and other expenses. If the seller then has to sell at a lower price than that which the defaulting buyer was due to pay, they can claim for the difference.

Is it worth the risk?

If it is possible, it is far less risky to complete the sale of your own house first and then move somewhere temporarily before buying another house. It is understandably less convenient to do so, as you have to move twice, and on the face of it more expensive as you may have to pay rent for a while, and house prices could go up between the time of the sale and the purchase. But if you have already completed your sale when you are looking for your next house you will find yourself in a far better bargaining position, and the chances of suffering inconvenience and financial loss by something going wrong at completion through no fault of your own are minimised.

Get in touch with our conveyancing solicitors in Banbury, Bicester and Rugby

For more information please contact our property conveyancing solicitors at our offices in Banbury, Bicester or Rugby.

Brethertons were friendly, efficient and kept me informed at all times. I was confident that he would do what he said he would do. To my great delight he did exactly that! A job well done.
David Leytham
You made buying our very first house less stressful - very happy with the service. Thank you very much.
Emily Hedgecock
Brethertons made the purchase of our first house incredibly straightforward and stress free. We were kept very well informed throughout, and they even put up with all our ignorant questions without complaining! Thank you.
Murray Naish
Buying a home can be very stressful because of the sums involved and the number of variables - Steven's expertise and communicative approach made the process a pleasure.
James Peake
Going through this house sale was my first experience as executor and selling a house I found it was made very smooth and straightforward by Brethertons.
Brethertons has done a great job on our house sale. Due to our property being in a development maintained by a property management company, I was concerned about the potential delays that might cause but I provided Brethertons with some important information early on and she made sure that all aspects proceeded smoothly. Overall, very happy with the sale and had no hesitation in asking Brethertons to deal with our house purchase.ï»¿
Haythem Al-Kishtaini
As with our previous experience of Brethertons we enjoyed a highly efficient, knowledgeable, approachable and helpful service. Many thanks.
Erica Forrest-Owen
Good communication at all times, prices adhered too. Slight misunderstanding to begin with with regards to remortgaging but quickly rectified. Would highly recommend to others.
Good, clear and regular communication, chasing of other parties. Very high level of service.
Thanks Steven for such excellent service once again. We'll be back.
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Brethertons managed our case. Very professionally and kept us informed at all times.
ï»¿Superb service which gave me confidence in the smooth process of my house sale and purchase. My thanks go to all involved.
We look forward to working with Brethertons as our local solicitors of choice for any legal matters we may have.
The Brethertons team exceeded my expectations and couldn't have been more helpful.
Once again, l would like to praise Leo Deane. He was very efficient and a pleasure to deal with - Thank You.
We found the staff at Banbury were very friendly and helpful. Leo Deane was very good.
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Keep up the good work.
Please keep the personal approach, as l find this very important rather than leaving everything to be notified on Email etc.
I was very happy and my agents commented at the start of your reputation of efficiency. Always got back to my calls and emails. Made the process very easy - Thanks!
If all staff are as patient, polite, helpful & thorough as Fiona and Harvey - Then you will have no problems. They were great, thank you.
Brilliant service. Always took/returned calls promptly, efficiently & kept me informed. Totally reliable and very friendly.
I have used diators services pretty frequently and I must say this was if not the best. The ability professionalism and determination to make progress when our purchaser's solicitors were inefficient. I would recommend Brethertons without hesitation.ï»¿
At this time cannot see any need for improvement. Totally satisfied with our experience of dealing with Brethertons.
I have nothing but praise for Brethertons in Banbury.
Keep up the good work. You are doing a grand job.
Excellent level of service. Would definitely use again and would recommend highly.
I feel the level of service given to me was excellent with friendly, efficient, professional and caring staff.
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Carry on! Very good job. I am truly satisfied with the service provided. It has been refreshing to deal with professional people who get a good job done. Thank you for making a stressful time stress free.
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We have used Brethertons many times - Wills, POA, Conveyancing etc. Always handled professionally.
Brethertons have given excellent service in the past and this time was just as good if not better.
I recently had the pleasure of working with both Lottie and Julia during the house-buying process, and they were absolutely fantastic. Their professionalism, attention to detail, and clear communication made everything go smoothly. They were always quick to address any concerns and ensured the process was as stress-free as possible. I highly recommend Lottie and Julia for anyone in need of expert solicitors who truly care about their clients.
From start to finish David Hayward was proactive, efficient and kept me in the loop throughout the whole process
Excellent service from Julia and Lottie. Very sympathetic and customer focused whilst maintaining the highest professional standards