Are you selling your home privately or maybe purchasing a property or a business through private sale? Then you will need a conveyancer to prepare the legal documentation for you. A private contract is required when you have found a buyer of your property or business and you haven’t had to list it with a Real Estate Agent. Now, when selling your property or business privately it is essential that all dealings are in conjuncture with the Real Estate Property Act or if you need loan documentation to secure a debt, your conveyancer can help you with that by:
- Initial contact and instructions
- preparing the contract
- conducting all government searches
- preparing the Form 1 or Form 2 (required under Section 7 of the Land and Business Sale and Conveyancing Act 1994)
- as well as issuing all the necessary documentation to you and the purchaser.
If it’s a complex matter regarding multiple mortgages, caveats and guarantees then your conveyancer will advise you on what is legally required for you to sell your property or business. There will be additional documents and other parties that may be involved which need to prepare third party documents. This is all handled by the Conveyancer to ensure they have all necessary documentation to complete settlement.
DISCUSS THE CONDITIONS OF THE CONTRACT WITH YOUR CONVEYANCER
No matter if you are selling or purchasing in a private matter you will need to discuss and agree to the conditions of the contract with your conveyancer.
The Vendors Conveyancer would liaise between both parties in the initial phase to obtain all the contract information and ensure both parties have provided all the details they would like included in the contract. This may include conditions such as finance clause, building & pest inspection, works to be completed and many other conditions. The Form 1 or Form 2 is served shortly after the signing of the contract and this enables purchasers a certain number of clear business days of cooling off rights. In the case of a property this is 2 clear business days (this could be different if a commercial property) and in the case of a business it is 5 clear business days.
The Purchasers Conveyancer would discuss the draft contract with the purchaser and this forms part of the negotiating stage in which the conveyancer will ensure that everything in the contract is understood and agreed by all parties.
TAX FINANCIAL AND LEGAL ADVICE
It is always recommended that you seek either legal or accounting advice when buying and selling property whether privately or on the open market. Your accountant, financial planner or solicitor can all assist in making sure that you have the right tax advice, what is the best entity to hold the property in and where funds should go to after the sale has been completed. It is always best to ensure you understand how buying and selling can affect you in the future.
It is also very important that both the purchaser and vendor have their own independent conveyancer to complete their part of the conveyancing transaction. This will avoid any conflict of interest that could occur if you both used the same conveyancer.
The difference with a private contract is that the deposit payable by the purchaser will be paid directly to the Vendors Conveyancers trust account instead of a real estate agent trust account. This is held securely in the trust account until settlement date. Keys are also handed over by the Vendor to the Conveyancer prior to settlement and they are then handed over at settlement unless otherwise agreed.
Private contracts are a positive way to deal with a sale and purchase of properties and businesses as you can negotiate between each other and deal with the transaction in a timely matter that suits both your needs.
If you require advice on contractual arrangements, special conditions and any other obligations then please contact McKay Business Services on 08 8333 3525 for a free confidential initial discussion.
See also: Form 1 and the Cooling Off Period