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, 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
The property will then be advertised showing the ownership role and percentage of ownership on offer.
Step 3: The Sales Contract
Once an offer has been made, the contract of sale will be drawn up using the title structure Tennants in Common, normally showing the ownership share being sold as a fraction. eg; 50/100, reflecting 50% ownership.
Important: When an offer is made 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 the 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 original Co-ownership agreement signed must be transferred to the new owner. This is unless both co-owning parties agree to have it changed.
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.
You can get in touch with our legal team to transfer or amend a co-ownership agreement here.
Step 5: Getting Your Shared Ownership Loan
If the buying co-owner requires a loan for the property, they will need to approach the same lender as the original co-owner. We strongly recommend you use Commbank, as they offer a loan package where both loans are 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.