OK so I’m selling for $194k but to help the purchasing I will let them pay $184k now and leave the other $10k in the deal to be paid in 12 months time.
How is the paperwork done for this in the sale and purchase agreement? Does the title change hands now or after the 12 months ? Just need the nuts and bolts of doing this sort of thing.XeniaMember@xeniaJoin Date: 2002Post Count: 1,231
You can secure a registered 2nd mortgage for the balance on the title of the property. in this case the title is transferred now.
I f you really want to be creative you could take out a promissory note for the balance. This is just something that is interesting to me but I dont really understand it fully.
Here is a definition
and off course ASIC have something to say too
Thanks DrX, no doubt my solicitor will know what to do.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
Title will transfer now, but it is really up to you how you secure the $10,000. It could be a 2nd mortgage, a caveat, a loan contract, etc.
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Just send me a blank email, with â€œsubscribeâ€ in subject line.grossrealisationMember@grossrealisationJoin Date: 2005Post Count: 1,031
easiest way is to caveat.
first the buyer organises his/her finance(for the feminests its easy for me to do just him)
you post dating the caveat to be 4days after settlement as you can’t(well you can put the bank will ask you to lift it) put a caveat until the new owner owns the property.
The caveat cost about $70.00 in nsw and is relatively cheap for what it is and can’t be lifted by any court apart from the supreme court and is even difficult for a liquidator to lift.
once the person pays you the agreed amount ( what ever you have agreed)then you lift the caveat.
if any question email me most of my developments run on caveats in some form.
2nd and 3rd mortgage and loan contract don’t give you the same security as a liquidator can lift any of the three but if a caveat is in place prior to liquidation the caveat must be cleared first.
as it is a classed as secured creditor and the liquidator must lift it prior to any sale.
a liquidator works for the largest creditor (usually a bank or the ato)and thats who pays him put unless he releases you he can’t access any funds and its cheaper to do a deal with you
hence I like caveats and carry currently five caveat forms in my office for my deals.
as for promissory note
A you would need to understand what they are
B your solicitor wouldn’t know what they are and if he does wouldn’t recommend them and
C the purchase wouldn’t sign unless he knew all of the above AND HIS SOLICITOR wouldn’t agree any way.
you could use vendor finance on the contract and charge an interest rate for the term 6% but you would need to put a second mortage and pay 2,000 roughly
it your call this is my .002
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