Selling a Co-ownership property can be an exciting and gratifying experience, it can also be very daunting with little to no information on the process to follow. We’ve put together this article that shows you the complete process on how to sell a co-ownership property.
Here are the 7 steps for selling a co-ownership property:
Step 1: Find an Approved Co-own Agent
Step 2: Waiting for an Offer
Step 3: The Sales Contract
Step 4: The Co-Ownership Agreement
Step 5: Getting Your Shared Ownership Loan
Step 6: Settlement
Step 7: Managing the Co-ownership Relationship
Step 1: Find an Approved Co-own Agent
Before advertising the property, you must first decide if you will be an occupying or investing co-owner. To learn more about how the two co-ownership options work, click here.
As not every agent is aware of the process, It's crucial that you choose a real estate agent trained in co-ownership dealings.
You can find an approved co-own agent in your area by filling out our contact form here.
Step 2: Waiting for an Offer
Once you have chosen an agent, your property will then be advertised showing your requested ownership role and the percentage on offer. This will be between 25% - 75%.
Step 3: The Sales Contract
We strongly recommend that your contract of sale is drawn up by a licenced real estate agent or solicitor. Using Tennants in Common, the ownership share offered will generally show as a fraction. eg; 25/100, reflecting an ownership share of 25%.
Important: When making an offer to purchase the property, you must include a special condition like the example below in your contract of sale.
A special condition like the above gives you and your potential buyer the option to pull out of the deal if the Co-ownership Agreement can’t be agreed upon.
Step 4: The Co-Ownership Agreement
The Co-ownership agreement is the most important part of the transaction. The agreement sets out each parties legal rights and obligations, it also addresses any foreseeable issues and provides a means of dealing with them. All parties owning the property will need to agree to the co-ownership agreement before the sale can go through.
We have designed a unique Co-ownership Agreement with our partners that covers potential issues and protects both co-owning parties. We strongly suggest you use Co-own.com.au to draw up your co-ownership agreement.
Step 5: Getting Your Shared Ownership Loan
If both the selling and buying co-owner require a loan for the property, you will both need to approach the same lender that caters for shared ownership loans. We recommend you use Commbank, as they offer a loan package where both your loans will be treated independently. You can find out more and get in touch with a shared loan specialist here.
Step 6: Settlement
This is by far the most exciting time for all involved. The Owner Occupier will take up residence in the property and the Owner Investor/s with start receiving rent based on their ownership. The Owner Investor will not have access to the premises unless organised with the Owner Occupier, as per the co-ownership agreement.
Step 7: Managing the Co-ownership Relationship
It’s important to keep a healthy relationship between both co-owners. It’s advised that you use a property manager to manage the property and act as an unbiased mediator for both parties. The property manager would collect the rent owing to the Owner Investor/s, pay bills and coordinate any repairs and maintenance that is needed on the property. You can get in touch with a co-ownership property manager here.