Not everyone goes through a real estate agent when they’re selling their property. Private sales may not be the norm, but they’re not rare either.
But private sales can create long term headaches for both buyers and sellers if certain points aren’t checked properly. That’s where talking to us comes in – and make sure you talk to us early.
Here are a few basic things that you need to consider.
Buyers – don’t sign ANYTHING without talking to us
The most important thing for a buyer to remember is not to sign anything, not even a short note to record the price, until there’s a proper sale and purchase agreement and we’ve checked what that agreement says.
The law only provides for one contract. If you sign a note to record the price, there is no right to add terms afterwards – including conditions you might want to apply to the sale, such as making sure you have finance, or getting a builder’s report to check there aren’t major defects.
So never sign anything until you have a contract which has been checked by your lawyer. That way, you’ll know exactly what you’re signing up for.
Sellers – how to handle the builder’s report
Sellers can give builders and LIM reports to buyers. However, we always advise that they should include a clause in the sale and purchase agreement exempting them from liability for any errors which may be in the reports.
If we’re preparing the contract for the seller, we’ll make sure this clause is in it. If the buyer’s lawyer prepares the contract, we’ll give the clause to them to insert.
If that clause isn’t there, the seller is much more likely to be in the gun if the report has missed something – for example it says the house is watertight when it isn’t. Leaving it out can prove seriously expensive.
Who prepares the contract?
The convention is that the purchaser’s lawyer usually prepares the contract. Sometimes, though, it’s more convenient for the seller’s lawyer to do it because the seller knows all the details of the property, which can make the drafting easier and faster.
Where does the deposit get paid to?
The agreement should state that the deposit is paid to and held by the seller’s lawyer until all conditions are satisfied.
Make sure the chattels listed in the contract are the ones you intend to sell (same for buyers – make sure the list includes everything you think you’re getting).
Also sellers need to check the warranties that you give to the purchasers regarding things like working condition of the chattels and any building works that have been done to the property.
Image: Cuneiform tablet recording a house sale contract (presumably it was a private sale!), Source: Wikimedia Commons