When a property chain collapses, it’s bad news for all parties involved, from the house buyers and sellers to the developers. Fast property completion is essential for delivering the highest standards of customer service, maintaining a positive brand reputation and attracting new buyers.
So how can property developers repair a broken property chain?
Why Do Property Chains Collapse?
Almost half of all property sales fell through in the final quarter of 2018. The most common reasons for a buyer to pull out of a sale include problems selling a property or securing a mortgage, the seller receiving a higher offer, issues highlighted in a survey, delays in the sale process and late demands for reductions in the price.
If a sale falls through for any reason, this can prevent a buyer further down the chain completing on a property in your development.
What Can Developers Do to Avoid a Broken Chain?
While much lies in the control of the homeowners and buyers, there are steps building companies and property developers can take to repair a broken chain.
Good Communication
If problems arise for your buyer, good communication is the first step to resolving the issue without losing a sale. Make sure your company has an effective communication system in place and that customers know how to contact the right person to help them.
If a problem is temporary and easily surmountable, there may be a compromise that can be reached to ensure the buyer does not lose their home and you do not miss out on a sale.
Part-Exchange
Offering customers a range of finance options is excellent customer service that will enhance the reputation of a company and increase the pool of potential buyers for your buildings. Buyers who have access to the right property purchase financing can move quickly towards completion without being impacted by broken property chains.
Offering part-exchange (PX) to customers purchasing a new-build property is beneficial to property owners and buyers. Many people cannot complete on a new home until they have sold their existing property. If your buyers are struggling to sell their home or if their sale falls through, this could mean a lost sale for you.
A PX scheme allows you to purchase a buyer’s current home at slightly less than the market value, in exchange for a reduced price on one of your properties. You can then sell on the property at a profit in addition to securing the sale on one of your new-build homes. In this way, PX can be used to avoid and repair a broken property chain.
Chain Repair Companies
If a chain collapses affecting the sale of one of your properties, a specialist chain repair service can be an effective and hassle-free way to save the sale. A chain repair company can shorten the property chain length, remove the need for a buyer to sell their property before they purchase yours and prevent delays to your development plans and a lost sale.
How does it work? The company will send an agent to value your customer’s property and then send a cash offer, which you can extend to the client. If the offer is accepted and a sale date agreed, the buyer can proceed with purchasing the new property from you. If the client is amenable to this option, it’s an effective way to meet key deadlines despite property chain issues.
Final Thoughts
The success and profitability of property developments rest on hitting key milestones and deadlines. A broken property chain can result in lost sales and delays, which can seriously impact the bottom line. If your buyer encounters issues selling their home, communicate, be flexible and take proactive action to find a solution. Saving a sale already in progress is likely to consume fewer resources than starting from scratch searching for a new buyer.
