The lawyers role in Private sales and purchases of Property

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The number of private sale contracts (properties being sold without a real estate agent) comming through our ofice has increased substantially over recent times so I imagine it would be the same across the industry. I did however do a quick search on Trademe and note that of the latest 100 homes that were listed in the Auckland area over the last few days 36 of these were private listings.

During tough economic times everyone tightens their belts, cuts corners and learns to make do without the “non essentials”. When it comes to selling a house the biggest cost is the agents commission so its understandable that Vendors are turning to do it yourself options.

Having a good agent can make the sales process a lot less stressful for the Vendor and a professional sales person often generates far more interest in the property and achieves a higher sales price than the Vendor would marketing the property alone, however I understand that in the end it comes down to cost and if people believe they can save some money then why not give it a try. You should be aware however of the fact that an agent does more than just market the property and show prospective buyers through. Agents have other vitally important roles in the sales process, acting as a go between in the negotiation process, drawing up the sales and purchase agreement and holding the deposit on trust until the agreement is unconditional to name but a few. If you are considering buying or selling a privately then these functions need to be fulfilled by your lawyer.

Get your lawyer involved in the process from the start and use their expertise throughout especially for:

  • Drafting S&P Agreement and clauses
    A Sale and Purchase agreement is a legally binding contract so both parties should get legal advice before signing. Usually the prospective purchaser will get a Sale and Purchase Agreement (with any conditions they would like incluced) prepared by their and will then present this as an offer to the Vendors. Attempting to complete a S&P Agreement without a lawyers input can (and does!) lead to errors, omissions and disputes which can be costly and unpleasant to resolve.
  • Negotiating
    A major reaon Vendors choose not to market their own home is horror at the thought of having to negotiate a price for the sale of their major asset to which they are emotionally attached. The solution is to forward the purchaser’s offer to your solicitor, or advise prospective purchasers to deal directly with your solicitor, who you will liaise with regarding any counter offer and/or acceptance or rejection of specific terms. The same goes for the Purchaser, if you feel uncomfortable negotiating directly with the Vendor you can ask your lawyer to do this for you.
  • Payment of deposit
    Never pay the deposit directly to the Vendor as it may be hard to recover if the agreement is cancelled for any reason and the Vendor may spend it and not have sufficient funds to repay the mortgage on settlement day. A deposit should only be paid into a trust account so if there is no agent involved it can be paid directly to the Vendors lawyers trust account.

Once the initial negotiation and signing of the S&P Agreement is completed your lawyer can then help with the Conveyancing part of the transaction. Please feel free to contact us for help with your private sale or purchase.

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2017-06-27T10:22:43+00:00 Property Law|