The decision to sell one property and buy another typically comes hand in hand.
When you do these two things simultaneously, you become part of a ‘chain’ – an interconnected series of transactions between buyers and sellers.
Overview of property chains
As a buyer, you can only move into your new home when the seller completes their purchase. And someone else can only move into your property when you have bought your new house.
Unfortunately, you only need one chain link to break, and everything falls apart.
There are many reasons why you may want to buy and sell a house at the same time, including:
- You can’t afford to own two houses at once
- You want to move and settle quickly
- You don’t want to be without a home for a few days/weeks, even if it’s only temporary
However, many factors can make selling and buying simultaneously a dangerous decision.
Read on to discover ten common pitfalls of selling and buying a house simultaneously.
1. Varying levels of commitment
Everyone must be on the same page when you join a property chain.
Unfortunately, different buyers/sellers typically have varying levels of commitment to a deal.
For example, one family may need to move out instantly because the breadwinner has left their job, and they can no longer afford to live in their property.
Meanwhile, someone else in the chain may be slowly browsing and keen to take their time for a few months.
Varying levels of commitment along the chain can create significant difficulties for someone buying and selling a house simultaneously.
2. Varying levels of capability
Some property buyers have varying levels of capability to do a deal compared with others.
For example, some buyers may need time to find available funds– others will immediately.
When you are ready to close the deal and sell your property, but the homeowner you are simultaneously buying from needs more time to raise cash to move house themselves, this becomes a significant hurdle.
3. Poor communication
It would help to maintain momentum when buying and selling a house simultaneously.
A fundamental way to achieve this is through regular communication with all other individuals involved in the chain.
With the right people skills, you can navigate this common pitfall by actively getting everyone in your chain’s contact details.
However, you cannot force people to talk to you – and if other house buyers are uncommunicative, your deal(s) may start to break down.
4. Failing to connect your estate agents
Some people use the same estate agent to buy their new property and sell their existing one, while others sign contracts with two separate agents.
In this latter scenario, a major pitfall is failing to connect your agents. Clear and regular communication is essential to ensure everyone within a property chain completes their transaction on the same day.
You cannot achieve this if you don’t connect your estate agents and other estate agents along the chain.
5. Talking about a completion date too early
It is not necessarily a problem to have a completion date for both of your deals in mind.
However, sticking too rigidly to a pre-conceived idea of a completion date will result in you getting ‘ahead of yourself’, often before the paperwork has been taken care of.
Try to remain adaptable as different situations emerge. This is an essential skill if you operate within a large chain. The more people involved, the more surprises there tend to be.
6. Failing to understand the market
A ‘cold market’ occurs when there are more sellers than buyers, while a ‘hot market’ occurs when there are more buyers than sellers.
When buying and selling a house simultaneously, you must understand the nature of the market in the area where you are selling and where you intend to purchase.
For example, if you are moving house but staying in the same neighbourhood, and it is currently a ‘hot market’, you should start buying before selling.
You need to understand the market you are operating in to get your timings all right.
You may complete one of your transactions way before the other.
For example, you should remember that the type of market can vary according to the location. While it may be ‘hot’ in London, it could be ‘cold’ in Cornwall.
7. Failing to consider post-possession
Failing to arrange for post-possession is an error often made by individuals selling and buying simultaneously for the first time.
You cannot predict the future, even if you are confident that everything will be completed on the same day without problems.
So, having a contingency plan (in the form of a post-possession agreement) is always best.
What is a post-possession agreement?
A post-possession agreement is when you officially sell your current home but rent it back from the new buyers for a pre-determined period.
These agreements usually last less than 30 days, and the rent is a nominal amount paid in escrow.
Put simply, you get to stay in your current home after closing a sale.
8.Make sure your solicitor is proactive.
It is critical that your solicitor keeps you in the loop and gives you the best advice when you are selling or buying a house.
Hiring a solicitor who is not proactive can cause frustration and bad feelings – internally and with others involved in the chain.
You should ensure you have an alternative contact at your solicitor’s organisation if they are out of the office.
Ask your friends/colleagues for recommendations, and check reviews online before committing to a solicitor too hastily.
9.Keep all your documents handy.
All the documents related to a property transaction need to be accessible at a moment’s notice.
For example, storing these documents in the cloud is an excellent idea because it ensures they can be accessed anytime, wherever you are.
It’s a good idea to either hand-deliver or send documents via registered post to ensure they arrive on time.
When your documents are always handy, you can respond promptly. Therefore, failing to take this crucial step is a pitfall that may cause the chain to break down.
10. Agree and stick to dates
You must agree on dates with your estate agent and solicitor and ensure everyone follows them. If everybody follows the agreed dates, everything will be on track.
For the best results, put your agreements down in writing – so you all feel ever-so-slightly ‘pressured’ to stand by your word.
Avoid common pitfalls with We Buy Any Home
You must agree on dates with your estate agent and solicitor and ensure everyone follows them.
If everybody sticks to the agreed dates, everything will be on track.
For the best results, write down your agreements so you all feel ever-so-slightly ‘pressured’ to stand by your word.
However, the easiest way to avoid these pitfalls is to find alternative ways to sell or even explore your options to sell your property yourself.
We Buy Any Home is the UK’s leading home buying company and one of the country’s only genuine cash house buyers.
We can purchase your property in as little as 7 days and are entirely chain-free– making it easy for you to ensure your sale and purchase go through simultaneously.
