A new chain-breaking solution, trialled on the Isle of Wight, is being launched nationally.
The Chain Solution, a company co-founded by property investors Neil Payne and Tim Rogers, a former estate agent, will buy the property at the bottom of the chain to enable all the other transactions to go ahead.
It will do so at a discount part-funded by a 3-5% discount given by each of the other sellers in the chain, who also pay a small fee on completion.
The property will then either be retained by Payne and Rogers and their two business partners, and rented out, or sold on quickly to a first-time buyer at a ‘Robin Hood’ discount of 85% of its value. The company will gift them their 15% deposit which will enable them to finance the purchase.
Payne said: “This solution works best for chains of four or more properties, where there is a reasonable spread of values. The more properties in the chain, then the lower the discount the sellers need to give.
“We felt that something was needed to stimulate the housing market. We launched it where we ourselves are based, on the Isle of Wight, and it’s working: we currently have three sets of deals going through, so we decided to launch it nationally.
“It’s not a complicated scheme – by taking out the bottom property, the job is done.”
The property at the bottom of the chain is normally purchased by the Chain Solution at between 95-97% of market value, as assessed by an RICS surveyor. Of the completion fee charged to each of the vendors in the chain, Payne says there has so far been no resistance: “The alternative is a chain not proceeding and the properties involved being returned to a depressed market for a substantially reduced figure.”
For sellers at the bottom of the chain, the company will offer 95-97% of market value, compared with the 60-70% offered by most traditional chain breakers. It will also consider helping others stuck in a chain and who are prepared to take a discount.
The Chain Solution system says it will also pay estate agents a generous commission for recommending the system, on top of their standard sale commission.
www.thechainsolution.co.uk
Comments
I agree truth, how refreshing to see a concept that actually helps everyone involved in the property related industry to keep going...not only that it's about time First Time Buyers were given a helping hand to buy with no strings attached!! If Estate Agents use this concept, there would be increased house sale, less estate agents, solicitors and surveyors companies closing their doors resulting in less redundancies to start with...This could save us all.
Now that's what I'm talking about... innovation, guys I take my hat off to you.
I feel you need to speak to My Property Hero as they too are doing what they can to help Kick Start the buying process and assisting first time buyers. I have to say Negativity and refusal to think out side of the box will be the end of a lot of Estate Agents.
Estate Agents really need to wake up and look at what's actuall going on out there and think how can we utilise new ideas that are poping up, there is a new dawn of Entrepreneurs and if they aren't carefull they'll steal the business right from underneat them.