TOP 5 MISTAKES SELLERS MAKE WHEN SELLING A HOME
To save you time, money and stress, we have set out below the top errors to avoid when selling a home.
#1 Rushing into signing the contract
You’ve got an offer for your property and want to get the contract signed as soon as possible.
However, it’s important to check a few critical items before you sign:
- Ensure your name listed on the contract matches that listed on the title (including any middle names or an ACN if you’re selling as a company).
- Ensure you properly disclose encumbrances that will remain on title after settlement, for example any covenants or registered leases. If you don’t, this may entitle the buyer to later terminate the contract.
- If you are selling a property within a body corporate, ensure you provide a signed disclosure statement to the buyer before they sign the contract. Again, failure to do so may entitle the buyer to later terminate the contract.
- If the property has a pool, be aware of your obligations to provide a pool safety certificate. You can find more details here: https://www.maplawyers.com.au/buying-or-selling-a-home-with-a-pool-in-queensland/
- Be careful where you are selling a property that is currently tenanted. If the tenant will remain in the property following settlement, the tenancy needs to be fully disclosed on the contract. Alternatively, if you are offering vacant possession at settlement, it is vital to ensure you are capable of providing this (either by serving appropriate notice to leave to the tenant or by having written confirmation from the tenant that they will vacate the property).
Many people think that, because they are selling, they don’t need to get their contract reviewed by a solicitor before signing. However, this can be a mistake and can open you up to risk.
At MAP Lawyers, we offer a pre-signing contract review service and will highlight any red flags in the draft contract, including any issues with special conditions inserted by the buyer.
#2 Trying to do the conveyance yourself
Whilst selling a property may not involve as many investigations as buying a property, it is still important to engage a solicitor. Solicitors are able to provide timely and detailed legal advice, which is crucial when unexpected issues arise.
If you try to handle the conveyance yourself, you will need to liaise directly with your bank to organise settlement, liaise directly with the buyer’s solicitor to resolve any queries or problems and potentially attend the actual settlement (or if you are selling as a company, you will need to engage a PEXA settlement agent to conduct the electronic settlement on your behalf).
#3 Delaying
The conveyance process involves a number of steps and a number of parties. As such, it’s essential not to delay in actioning any requirements on your end.
If you have a mortgage, it’s important to contact your bank as soon as possible to submit a discharge authority form. It can be tempting to wait until after your contract has gone unconditional before submitting this – however, this may not leave enough time for the bank to process the form and can put settlement in jeopardy.
#4 Relying on verbal agreements
Remember to get any verbal agreements between yourself and the buyer formalised in writing via your solicitor.
For example, you may agree to allow the buyer to access the property for the purposes of storing some belongings before settlement. However, it’s important to let your solicitor know about this so terms can be agreed in writing to protect you – such as ensuring the buyer is responsible for any damage caused to the property while they are there before settlement.
#5 Relying on deposit funds to pay out your mortgage or not having sufficient funds to pay out your mortgage
At settlement, the buyer will pay you the purchase price, less the deposit they have already paid (plus or minus some adjustments for rates and water). Typically, it is only after settlement, that the deposit funds (less the agent’s commission) will be transferred to you.
As such, if you need the deposit funds to be able to pay out your mortgage and settle, it’s critical you tell your solicitor about this as soon as possible. They will need to make arrangements with the agent and buyer’s solicitor for the transfer of funds in time for settlement.
Similarly, if the total purchase price will not cover the amount you need to pay out to your bank to settle, you will need to inform your solicitor as soon as possible. In this case, you’ll need to arrange a transfer of funds into their trust account to ensure settlement can still proceed on time.
