The One Real Estate has recently closed two nomination sales. Both purchasers were overseas investors who were looking to invest in Melbourne and only viewed the apartments for sale in Doncaster via our social media post. The properties were for sale off-market and only advertised on our website and our social media platforms.
It was a win-win situation whereby the original purchasers, managed to sell the property they no longer wanted to or could not settle and the nominee buyers obtained a discount which they would not have, even if they purchased directly from the Developer. Both the original purchasers and the nominee buyers were very happy with the outcome.
Here is an example of a typical off-the-plan nomination sale process.
Contract of Sale
When purchasers add 'and/or nominee' to their names in contracts, it allows them to nominate a trust fund or add a partner to the title. In cases where the purchaser cannot settle on the property, then can nominate anyone they choose including a new buyer.
A nomination sale is more prevalent in new developments where the original purchaser has purchased unconditionally from the Developer. In such a case, the nomination process is where the original purchasers/contract holders, transfer their off-the-plan contract to a nominee buyer.
Reason for Nomination Sale
The possible and common reason for the original purchaser to sell prior to settlement could be due to not obtaining the approval for a bank loan resulting in insufficient funds to settle.
The original purchaser can then appoint a Real Estate Agency to sell the property as a ‘nomination sale’, giving the option for a nominee buyer to purchase the property. The original purchaser will then nominate the signed contract to the nominee buyer and release any legal ties to their name and the title of the property.
The nominee buyer takes over the contract obligation, have it transferred to their name and finalise the settlement of the contract when due.
Benefits to Nominee Buyer
The nominee buyer benefits from the stamp duty savings of the original contract applicable at the time of signing and the majority of nomination sales will be at a discount to the nominee buyer, depending on the original purchaser's financial situation.
A nomination sale would not be an option for the original purchaser to make a profit as the property has not settled and would normally be the last resort for the original purchaser who cannot settle on a property.
Looking for a Nomination Sale?
If this is what you’re looking for, contact us soon as we have a few more properties available and nomination sales do not stay around for long!
DISCLAIMER: The above is general advice and intended as an opinion and guide only. Please seek independent professional advice for all legal, financial, or real estate matters specific to your circumstances, before making any legal, financial, or real estate decisions.