In the real estate market, most sales of primary residences have a clear objective: reinvesting in a new home. This process, known as a chained sale, requires meticulous planning to avoid financial risks or uncertain situations.
Unlike a traditional purchase-sale, a chained transaction implies that the purchase of your new home directly depends on the sale of your current property. This adds complexity, but with the right strategy, it is entirely viable.
What Is a Chained Sale and When Does It Occur?
A chained sale (or property chain) occurs when two or more real estate transactions are linked. That is, the sale of one property is only completed if the purchase of another is also effected.
Typical cases where it arises:
- ✔ Change of home due to necessity:
- Families needing more space.
- People looking to reduce expenses (downsizing).
- Homeowners with high mortgages needing to alleviate their financial burden.
- ✔ Personal situations:
- Divorces or separations requiring asset division.
- Inheritances where heirs sell to distribute capital.
- ✔ Investors with limited liquidity:
- Those who cannot pay a down payment without first selling their property.
The biggest risk: Your purchase is delayed or falls through because a link in the chain (another buyer or seller) fails to meet deadlines.
The Key Role of the Real Estate Agent
A specialized agent not only helps you sell your home at the best price, but also:
✅ Coordinates timings between the sale and purchase to avoid legal gaps.
✅ Manages negotiations with all parties (buyers, sellers, banks, notaries).
✅ Anticipates problems such as mortgage delays or breach of contract.
Without a professional, the risk of the chain breaking increases significantly.
Detailed Steps for a Successful Chained Sale
1. Prepare the Home for Sale
Before listing your property:
- Get a professional valuation to set a competitive price.
- Repair visible defects (leaks, cracks, peeling paint).
- Declutter and depersonalize the space to attract buyers.
📌 Important: Calculate associated costs (taxes, capital gains, agent fees) to know how much capital you will have available for the new purchase.
2. Search for a Buyer and New Home in Parallel
- If your house receives many visits in the first few weeks, it’s a sign that the price is right.
- If there is no interest, reconsider the value or improve the presentation.
🔹 Key tip:
“Don’t wait to sell to start looking. A good agent can help you negotiate flexible terms with the seller of your future home.”
3. Manage Earnest Money and Contracts with Caution
- Earnest money (10%): Make sure the buyer of your house pays it before committing to another property.
- Suspensive condition clause: Include in your purchase offer that it depends on your sale being completed.
⚠ Maximum security:
- Never hand over more earnest money than you receive for your property.
- If your buyer pulls out, at least you will recover your investment.
4. Coordinate Closing Dates
- Ideally, the sale and purchase should be signed on the same day (or with a difference of a few days).
- If you need time between one and the other, negotiate a bridge rental with the buyer of your house.
What Makes a Chained Sale Fail?
🚫 Lack of financing: If a buyer depends on a mortgage and the bank delays approval.
🚫 Unrealistic deadlines: Not calculating enough time for legal procedures.
🚫 Poor communication: When not all agents and lawyers are synchronized.
Solution: Work with an expert team that supervises each phase.
Conclusion: Is a Chained Sale for You?
If you need to sell to buy but fear being without a home or losing money, the solution exists. With a well-structured strategy and trusted professionals, you can achieve a smooth transition.
📞 Need personalized advice? At Hernán Bustos – Real Estate Experts, we have successfully managed hundreds of cases. Contact us today for a free consultation!
