Understanding the Selling Process

Understanding the Selling Process

The following is a summary of the process involved once we have found an interested party to purchase your management rights complex.

Letter of Offer

We will provide the prospective purchaser with a letter of offer document for completion. 

This document summarises their offer for both the business and residence, including the total purchase price.  It also details their purchasing entities, the estimated settlement date, and any specific clauses they would like to include.

Please note that the letter of offer is non-binding and does not incur any costs to you as the vendor. We use this document to facilitate negotiations and reach a mutually agreed-upon price before proceeding to the draft contract stage. 

Contract Stage

Draft Contracts - once the price has been agreed, you as the vendor will engage your solicitor to prepare draft contracts to be sent to the purchaser’s solicitor.  We will provide the necessary documentation to your solicitor for them to execute the draft contracts. This process can typically take up to a week for your solicitor to prepare.

Final Contracts – once both parties are agreeable with the terms and conditions within the draft contracts, final contracts will be executed by your solicitor and sent back to the purchasers solicitor for their clients final approval and signature.  Once signed by both parties your management rights business will be officially under contract.

Due Diligence – Verification of Figures

We will assist the purchasers accountant to contact you to arrange a suitable date and time for them to access your accounting records and undertake a formal verification of the figures supplied.  The timeframe for this to be undertaken is 21 days from signing of contract. A report from the verifying accountant will be sent to the purchaser for their consideration.  Once the purchaser is satisfied with the verification report this condition of the contract will be satisfied.

Due Diligence – Legal

The purchasers’ solicitor will then undertake their legal due diligence verification process on behalf of the purchaser. This process typically takes a further 2-3 weeks after verification of figures.  Once this condition has been satisfied both the purchasers accountant and solicitors verification reports will be sent to the purchasers’ lender (if they have one) for final finance approval.

Finance

The timeframe for this process is dependent on each individual lenders criteria, but typically can take a further 2-3 weeks for the purchasers formal approval.  Once this finance condition has been satisfied, you are unconditional.

Body Corporate Assignment

Upon your contract becoming unconditional, you will then notify your body corporate and body corporate manager of your unconditional sale contract.

From this stage you will be asked to obtain quotations on behalf of your body corporate for their legal representation in the assignment process.

Your body corporate will arrange a time to formally interview the incoming purchasers in order to give their final consent.  Your body corporate has up to 30 days to schedule this assignment meeting.

Settlement

Congratulations!  After formal body corporate approval, the settlement is scheduled, usually on the first day of the month for a smooth transition.  Training is undertaken seven days prior and seven days after settlement.

This entire purchasing process typically takes approximately 3-4 months. While this timeframe may seem lengthy, we are there to support you through this process.