If a property chain collapses before exchange of contracts, each party will usually have to cover the costs they have incurred up to that point. For a seller, this could include conveyancing fees, searches or other expenses depending on the arrangements you have in place.

There is, unfortunately, no obligation for the buyer who pulls out to compensate you for these costs. This is one of the frustrations of the English & Welsh property buying process, where either side can usually withdraw without penalty before contracts are exchanged.

It may be possible, but you should be extremely careful about committing yourself to an onward purchase before you are certain you can fund it. Once you exchange contracts, you become legally committed to completing the purchase on the agreed date.

If your existing property has not sold, you would therefore need another way of funding the purchase. This could involve savings, another mortgage or short-term finance such as a bridging loan. Always discuss the implications with your conveyancer and mortgage adviser before exchanging contracts in these circumstances.

A bridging loan can sometimes be used to effectively “repair” a broken property chain. Rather than waiting for your existing property to sell, the loan provides short-term finance that can enable you to proceed with your onward purchase.

However, bridging finance (often used in auctions) can be expensive, with interest, arrangement fees, valuation fees and legal costs to consider.

You will also need a credible exit strategy, which would commonly be the eventual sale of your existing property.

It’s therefore important to carefully compare the overall cost of bridging against alternatives such as reducing your asking price to secure another buyer more quickly.

Yes. If you have not yet exchanged contracts, you can ask the seller of the property you’re buying to give you more time to find a replacement buyer or resolve whatever issue has caused the chain to break.

Whether they agree will largely depend on their own circumstances. A seller who is in no particular rush may be prepared to wait, whereas someone with an onward purchase or other deadline may decide to remarket.  Keeping everyone informed through your estate agent and conveyancer can help prevent unnecessary uncertainty.

Potentially. If keeping your onward purchase is important, a sensible price reduction could help generate fresh interest and find a replacement buyer more quickly. You may also be able to approach buyers who previously viewed or offered on the property.  Some may have already found a different property, but it’s certainly worth a try.

Avoid automatically making a large reduction simply because the chain has broken. Look at current comparable properties, recent sold prices and feedback from previous viewings.

A relatively modest adjustment may be enough to attract a proceedable buyer without unnecessarily sacrificing thousands of pounds.

A broken property chain does not necessarily mean that your mortgage offer will be withdrawn. However, mortgage offers are normally only valid for a specified period, so a lengthy delay could mean that it expires before you’re ready to complete.

Some lenders may agree to extend an offer, although this is not guaranteed and they may reassess your circumstances. If the property you’re buying changes, you will usually need to inform the lender and further valuation or underwriting checks may be required. Speak to your mortgage broker or lender as early as possible if the chain problem is likely to cause a significant delay.

Auction can be worth considering when you need to replace a failed buyer and want greater certainty over the timescale of the sale. With an unconditional auction, the successful bidder normally exchanges contracts when the auction ends and then has a fixed period, commonly 28 days, to complete.

The trade-off is that the reserve price will usually need to be set at an attractive level to encourage bidding and give you a realistic chance of selling.

Alternatively, modern method of auctions typically provide buyers with a longer timeframe (commonly 56 days) to complete. This can open the property up to more mortgage-backed buyers whilst still providing greater commitment than you would usually have with a conventional estate agency sale.

For sellers trying to preserve an onward purchase, however, the combination of a defined timetable and a legally committed buyer can sometimes make auction a useful way of getting a broken property chain moving again.