Private sales offer a unique opportunity to buy directly from the property owner rather than going through a real estate agent. In these situations, because the seller is not paying commission, they may have more scope to negotiate the sale price with you.
Understanding buying privately
If you’re interested in a property that is being sold privately, think about the following:
- Engage with a lawyer before you start the process
- Get your lawyer to draw up the Sale & Purchase Agreement for the property you wish to purchase privately and have this signed by both parties
- It’s important to pay your deposit to your lawyer rather than directly to the seller, so that they can arrange for it to be held safely in a trust account pending the completion of the sale
- Buying privately means you will not be covered by the Consumers Guarantees Act or the Fair Trading Act
- A private seller must disclose any known issues with the property, however, if you have any doubts about this, talk to your lawyer
Property Valuation
In private sales, most banks will require an independent property valuation to be completed to ensure you’re paying a fair price. This valuation will provide an unbiased view of the property’s worth based on its features, condition and location. It will also detail comparable sales in the area.
This will be a cost for you to consider as part of your finance process.
Due Diligence is crucial
In private sales, thorough due diligence is crucial. We recommend that you engage with a lawyer to review all documentation, ensuring everything is in order legally. This step is vital in protecting your interests and avoiding potential pitfalls.
It’s also important to verify all claims made by the seller about the property. The seller has a legal obligation to share all relevant information about the property, such as issues with the boundary or title, any unconsented work, any known weathertightness issues and whether there are any proposed developments that could have an impact on the property.
If you have any doubts, talk to your lawyer.
Ask questions
In private sales, a seller isn’t required under a Code of Conduct to be ethical, so the onus is on you as the buyer to complete your due diligence.
Some questions that you should look to ask the seller income –
- Is there a Land Information Memorandum (LIM) report and title deed? If so, get your lawyer to check these thoroughly.
- Is the property in a flood-prone area? If so, how ask how it has fared in recent incidents.
- Has the property been subject to any EQC claims? If so, request evidence of any recommended remedial works.
- Are there any planned property or roading developments in the neighbourhood that could have an impact.
Need support with buying a home privately?
Whether you’re exploring your options or ready to make an offer, our experienced mortgage advisers are here to help. We’ll guide you through the finance process, connect you with trusted professionals, and ensure you’re well prepared at every step. Contact us today for friendly, expert advice tailored to your situation.
