There are certainly economic benefits to private sales, but investing in a good real estate lawyer is essential to realize them.
A private sale can be extremely desirable economically–after all, you can skip on paying commission to a real estate agent–but going ahead without a good real estate lawyer can cost you.
It’s becoming increasingly more common for sellers (or even those who hadn’t intended to sell) to be approached to sell privately without the use of a real estate agent. Private sales can be a great thing, but there are drawbacks to be aware of.
First and foremost, in a private sale your property is not exposed to the open market. This means you are not testing multiple offers and will never be able to confirm that the value you set holds true on the market. The best way to combat this uncertainty is by getting multiple, professional opinions. The more professional appraisals you have completed, the more confident you can be that you are indeed getting the equivalent value as you would in the open market–or that the savings from doing a private sale make up for the difference.
For those who have been approached with a private sale offer, we recommend sitting down with an experienced real estate agent from your area and learning about the benefits and services they provide. If you are still adamant in going this route, you’ll want to connect with a real estate lawyer before agreeing to anything verbally or otherwise.
When should I call a real estate lawyer during a private sale?
Your experience with the lawyers and the client service representatives at Titlers Professional Corporation, will be the exact same in a private sale as it would be in any other property sale. We always recommend working with a real estate lawyer as soon as possible to ensure your best interest is being protected.
Depending on the arrangement of a private sale, it will be up to either the buyer or seller to make the initial offer and connect with a lawyer to draft the agreement of purchase and sale. Since there is a fee for this, both parties will want to ensure there is strong interest in moving ahead.
When you get to this step, understand your real estate lawyer will not provide you expertise on the true market value of the property as a real estate agent would do. Instead, they will ensure you are prepared for the risks of the transaction.
The following information will be required to prepare the initial offer:
- Full legal names of buyer(s)
- Full legal names of the seller(s)
- Property address
- Offer/purchase price
- Deposit amount
- Deposit recipient (without a realty company, it usually would go to the seller’s lawyer, in trust)
- Confirmation who is making the offer (buyer or seller)
- Irrevocability date (how long will the offer stand)
- Closing date
- Items included in the transaction (this could become specific, such as: fridge, stove, washer, dryer, electric light fixtures etc.)
- Property type confirmation (single-family residential dwelling , duplex, triplex or multi-unit)
- Any rental items on property (typically buyer would assume rental contracts)
- Any Tenants involved with the property
- Any conditions (home inspection, financing, etc.)
- Name and contact information representing the other party
The above are some examples of terms that will be needed in the preparation of an offer. However, every transaction may require different terms and conditions depending on what the parties are looking to achieve.
Should I do a private sale in Durham Region?
While we won’t advise you one way or the other, we will stress the importance of working with a real estate lawyer if you decide to go the private sale route. Buying/selling a property is a complex process that can fall apart and if you are not prepared for all of the relevant contingencies, you may be left with a headache instead of a sale.
At Titlers Professional Corporation law office in Port Perry, ON, we utilize Our Unique Process to complete smooth closings for our local clients and clients across the province through our Contactless Closing. If you have questions about private sales, contact our team today.