Don’t Leave the Legal Work to Last in a Private Sale Between Friends or Family
Private sales – where property is sold without an agent, often between people who know each other – are appealing. They promise less formality, lower costs and more flexibility. Friends or family agree on a price and broad terms, then plan to “get the paperwork done later”. The more trust there is, the easier it is to fall into this pattern. Ironically, that trust is also why delayed legal work causes such damage when things do not go as expected.
One pattern we see is money moving before contracts exist. A buyer might pay a large “deposit” directly to the seller on the understanding that a contract will be drawn up shortly. If circumstances change – a relationship breaks down, a bank declines finance, someone has second thoughts – there is no clear written framework for what happens next. Recovering those funds can be slow and contested, and memories of what was agreed may differ.
Another issue is shifting expectations over time. Initial discussions about inclusions, improvements or timing may be enthusiastic but vague. As parties talk to their own advisers, or as months pass before the legal work is done, their priorities can change. Without a contract to anchor those expectations early, each side may feel the other is “moving the goalposts”. What started as a cooperative arrangement can slide into confusion and resentment.
Market movement adds further complication. If there is a long gap between agreeing a price and formalising the contract, changes in the market can put pressure on the deal. If values rise, the seller may feel they agreed too cheaply; if values fall, the buyer may feel they are overpaying. In both cases, the absence of a binding contract makes it easier for one party to try to renegotiate, or walk away altogether, leaving the other disappointed and potentially out of pocket.
Private sales also sometimes overlook statutory requirements. In NSW, for example, certain documents must be attached to a contract before residential property is offered for sale. In SA, Form 1 disclosure has strict timing rules. Informal agreements that ignore these frameworks can lead to technical problems later – missed cooling‑off rights, unenforceable promises, or disputes about whether parties are actually bound.
The underlying theme is that delaying legal work does not keep things “simple”; it keeps things vague. That vagueness favours neither side in the long term. A clear, early contract gives everyone a reference point. It helps ensure that the price, timing, inclusions, conditions and legal obligations are aligned before major steps are taken. Trust is better protected by clarity than by informality.
Declaration: This article is intended as general information only and is not legal advice. Because every property matter is different, you should obtain advice specific to your circumstances before making any decisions. To discuss your situation, contact JKA & Co Conveyancing for tailored advice.