Tips to make your sale go smoother
Whether you are selling your property privately or via an agent, there are ways in which to make the sale go a great deal smoother. Being organised, helpful and honest better ensures a smoother transaction, trust with buyers and less delays.
Having the correct information available for your own lawyer, your agent and potential buyers is especially important for those selling in Christchurch due to the amount of information now required regarding earthquake damage and repairs. Being honest about the state of the property or any other relevant issues is also important for appearing trust worthy and giving greater reassurance to buyers that you are willing to work through any issues.
Below is a list of tips for sellers and the kinds of information you should have ready for potential buyers to view or to show their lawyer. Such information includes EQC scopes of works, signoffs and insurance claims information.
Be open and honest about the property and chattels
Trying to hide issues or damage with the property is unwise. Your agent should advise you on how best to present such issues in order not to scare buyers away. But it is important to be upfront about them so that you do not appear dishonest or make buyers suspicious that you are hiding even more problems with the property. Not only is being honest reassuring to buyers that they are buying knowing that you are not trying to hide anything, it promotes better relationships and a willingness to negotiate should any issues come up later on.
Ensure that it is well documented as to what is included in the sale and what isn’t
It is important to document what is included in the sale in the contract. Some household items may be argued to be either chattels (ones that a vendor is entitled to take with them) or fixtures (items that must stay with the property) and so if there is any doubt, it is best to include them in the chattels list of Schedule 1 of the contract. Buyers should specify what they want to have included in their offer. However, if you are thinking of taking off with a nice mirror in the bathroom that is attached to the wall but easily removed, then it may become an issue for the purchaser when they inspect the property nearer settlement and see that you’ve taken it. Managing expectations of what is included and what will be taken is important to stop arguments and delays in settlement.
Have all EQC and insurance claims information and repair signoffs ready to present
See below for the types of information that is needed. Even if agents do not receive all the necessary claims information from you when they are marketing your property, you can guarantee that the purchaser’s lawyer will come asking for it. Purchaser’s lawyers have a duty to protect their client’s interests in the purchase and ensure that their clients are purchasing based on knowing the full story of the EQC and insurance claims. If you don’t have the information organised, it can increase your legal costs due to the time spent by your lawyer having to try and answer claims questions from the purchaser’s lawyer based on the incomplete information given by you. Having to find claims information in a time constrained timeframe can also add to the stress of going through a sale.
New tax laws that came in from 1 October 2015 now require that lawyers collect the following details from those involved in buying and selling their properties. If you have a trust, your trust must have an IRD number so applying for this in good time can avoid delays.
(a) Whether you are registered for GST.
(b) Are you or an immediate family member a New Zealand Citizen or a holder of either a resident, work or student visa?
(c) IRD number.
(d) Are you a tax resident in a country/ jurisdiction other than New Zealand?
(e) If so, where?
(f) What is the country code?
(g) What is your tax identification number?
(h) Is the property you are selling your main home/ main place of residence?
Be out of the property and ensure all rubbish and personal belongings are gone by the day of settlement
If you are providing vacant possession on settlement, it is expected that you and your belongings be gone by the time settlement goes through. Although it is highly unlikely that settlement will be done before 8am, some settlements can be done mid-morning and it is expected that the place be ready to move into. Therefore, it is best to ensure that the property is cleared by the day before so that you only need to do a final check of the property and hand over the keys ready for settlement on the day.
Have your landlord’s transfer sorted well in advance of settlement
If you are selling a tenanted property and the tenant is remaining, ensure that the necessary bond and landlord transfer documents are filled out by you and the tenant in plenty of time before settlement to avoid a mad rush to the end. Your lawyer and agent should ensure that this is done but it pays to know that such documents must be signed by settlement.
Ensure you cancel any rates direct debits
Make your lawyer’s job of figuring out the finances easier by cancelling your rates direct debit and not making any further payments (unless necessary) so that your lawyer can find out exactly how much is required to be paid on settlement to cover off the necessary rates.
Make sure you don’t damage the property or chattels before settlement
Under the standard clauses of the ADLS Agreement for Sale and Purchase, you as the vendor must warrant that the chattels delivered to the purchaser on settlement are your property alone and that you deliver them on settlement is a reasonable state of repair or at least in the same state as when the agreement was entered into. If you damage them or create a hole in the wall, expect to be asked to fix it or provide compensation.
Keep the place insured
Unless your property is an as is where is, you also have a duty to keep the property and chattels insured until settlement as they are your risk until that time.
EQC and Insurance claims information
- EQC Scope of Works and claim numbers
Evidence that repairs have been completed
-For small claims, this could be by way of photographic evidence, invoices for the works completed, letters of completion by builders, or even affirmation that the works appear to be done by a building inspector.
-For larger claims where you have opted to have Fletchers or another contractor repair the damage, you will need the signoffs – a Construction Completion Inspection Certificate from Fletchers describing the risk done, evidence that any deferred works or defects have been remedied, and the document must be signed off by the contractor, the owner and Fletcher’s, of if by another contractor, a sign off form that the work has been completed.
-If you have opted to be paid out and the work is yet to be done, a copy of the confirmation letter from EQC stating the amount of the pay out as well as the costed scope of works will be needed.
-If you have been paid out and have seen to the works yourself, again, evidence that the works have been completed and to an acceptable standard need to be provided. Evidence from EQC of the amount you were paid out must also be provided.
-For land claims, a schedule of damage, evidence of repairs completed (if they have been) should be provided.
-For insurance claims, again claim and policy numbers, a letter from the insurer stating how much they are paying/ have paid you out should be provided, as well as evidence of all repairs on the scope of works being done (if they have been) and done properly. Again, this would preferably be by way of a sign off from a registered builder and invoices for work completed.
-The vendor stating that all works have been completed is not enough to show that all works on the scope have been completed and to a good workman-like standard.
Therefore it is advisable to dig up as much evidence as possible of the repairs being completed and to hold on to any new evidence of works being done and by whom. Retaining evidence in an organised manner saves time in finding it later on and can avoid delays in the sales process. Being honest and helpful to your agents and buyers promotes good relationships with those involved and promotes trust which can have helpful consequences in future negotiations.
For more information or to receive advice on your own sale, please contact one of our conveyancing professionals at Saunders & Co. We’d be happy to assist you in making your sale as smooth as possible.