Majella Galvin: Caught in a property chain — why the highest offer isn't always what's accepted

It's important to consider not just who is offering the most, but also who is most likely to be able to make good on the offer 

We have found a few lovely properties that would have been ideal for us, but we seem to be missing out every time because we are being outbid

Hi Majella

My family and I have been trying to move to a larger home for more than a year. We love where we live and really want to stay in the area, but we need a bigger garden and another bedroom as our family has grown.

There have been very few suitable homes coming onto the market, so we even widened our search by another 20 kilometres. We have found a few lovely properties that would have been ideal for us, but we seem to be missing out every time because we are being outbid. The most frustrating situation happened recently. We were the highest bidders on a five-bed house on five acres, only to be told that the seller had accepted a lower offer because the other buyer was a cash purchaser. We explained that we would also be cash buyers once our own home was sold, but we were told the seller did not want to be involved in ‘a chain’.

We now feel completely stuck. If we put our own home on the market, we are worried it will sell quickly and we’ll have nowhere to go. But, if we don’t put it on the market, we could miss out on homes that would suit us.

Can you advise what we should do?

Tom

This is a situation we see regularly with families who are looking to trade up, so I understand your frustration.

People need a larger home, but find themselves caught between two difficult choices — sell first and risk having nowhere to go — or wait until they find their next home and struggle to compete against buyers who are already in a stronger position.

Unfortunately, this is one of the challenges of the current property market.

There are many more buyers looking for good quality family homes than there are properties available.

When a desirable property comes to the market, it can attract significant interest, with several buyers competing against each other.

The first thing I would say is not to let frustration push you into making a decision that is not financially right for you.

It can be very easy to become emotionally attached to a property, especially after searching for months or even years, but it is important to remain realistic and stay within your budget.

Caught in ‘a chain’

Many buyers assume that the person offering the highest price will automatically secure the property. However, that is not always the case. While the amount offered is obviously very important, sellers also consider the strength and security of the offer.

A seller is not only asking ‘Who is offering me the most money?’ They are also asking ‘Who is most likely to successfully complete this sale?’.

This is where your recent experience comes in. Although you were the highest bidder, the seller may have considered the other buyer to be a lower-risk option because they were chain-free.

A chain occurs when the purchase of one property depends on another property being sold. If one transaction is delayed or falls through, it can affect every other transaction connected to it. From the seller’s point of view, accepting an offer from someone who still has to sell their own home introduces uncertainty. They may be worried about delays, mortgage issues, or the possibility your own sale could fall through, leaving them back at the beginning.

This is why some sellers will accept a slightly lower offer from a buyer who can proceed more quickly and with fewer conditions.

Sale subject to conditions

So, what would I advise you to do? In your situation, I would strongly consider putting your own home on the market. I know that may sound like the exact thing you are trying to avoid, but it could actually put you in a much stronger position.

Many homeowners are reluctant to sell first because they worry they will be left without a home.

However, there is another option that many people don’t realise is available.

You can put your property on the market and make it clear from the beginning that the sale is subject to finding suitable alternative accommodation.

This is a very common situation, particularly for families moving up the property ladder. It means that when you accept an offer on your own home, everyone understands that you still need to secure your next property before the sale can proceed to completion.

The key to making this work is communication. Your estate agent should clearly explain your circumstances to potential buyers, so expectations are managed from the start.

Most buyers understand that homeowners need time to find their next property, particularly in a market where suitable homes are limited.

The advantage of taking this approach is that your position changes completely.

Instead of being someone who says ‘We will be a cash buyer once our house sells’, you become someone who already has their home sale agreed and is actively looking for their next property.

That makes you a much stronger buyer.

When you find the right home, you can approach the seller knowing exactly where you stand financially. You will know what your own property has been sale agreed for and you will be in a position to move quickly.

Early prep

I would also recommend getting everything prepared before you put your property on the market.

Arrange a valuation, speak with your solicitor, ensure your mortgage approval is in place if required, and have all your paperwork organised.

The more prepared you are, the easier the process will be when the right property comes along.

Another important step is to register your requirements with local estate agents and keep in regular contact with them. Good family homes are often in high demand, and agents will frequently contact suitable buyers before or as soon as a property comes onto the market.

Make sure agents know exactly what you are looking for, your preferred locations, budget and your current position.

A buyer who is organised and ready to proceed will always be remembered.

I would also encourage you to remain flexible where possible. You may have a clear idea of your ideal home, but sometimes the best opportunities come from looking at properties that have potential rather than properties that are already perfect.

A home with scope to extend, convert or adapt may provide the extra bedroom or living space you need.

The five key steps I would recommend are:

1. Arrange a valuation of your current home and prepare it for sale.

2. Put your property on the market, making it clear that the sale is subject to finding suitable alternative accommodation.

3. Ensure your finances, mortgage approval and solicitor are all organised.

4. Stay in regular contact with local estate agents.

5. Be ready to move quickly when the right property becomes available.

Finally, don’t lose confidence. Buying in today’s market can be challenging, particularly for families who need to sell and buy at the same time. However, buyers who are prepared and who remove as much uncertainty as possible are the ones in the strongest position.

My advice would be not to wait until you find your dream home before preparing to move. By getting your own property ready and making your position clear, you can turn yourself from a buyer who is hoping to proceed into a buyer who is ready to act. That could make all the difference when the perfect home finally comes onto the market.

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• Majella Galvin is chair of the Membership and Public Affairs Committee of the Society of Chartered Surveyors Ireland. She is a chartered surveyor, estate agent and registered valuer at DNG Galvin auctioneers Bandon.