For details on how the onsale process works in PEXA, please see description below the interactive tutorial screen.
Click on "What is it?" or "I'd like to see it" to get started. Note: To open the simulator in a new screen, click here.
A developer is building a suite of apartments and is selling the apartments 'off the plan'. Frank purchases one of the apartments for $350,000 and agrees to settle on the date when a certificate of occupancy is issued by the developer. Some weeks later, Frank identifies a buyer (Jenny) who is willing to pay $400,000 for the same apartment. Frank seizes the opportunity to make a profit of $50,000 and signs a contract of sale with Jenny. In the contract of sale Frank stipulates that Settlement must occur on the date when a certificate of occupancy is issued by the developer.
In this scenario the same Property is being sold by the developer and then by Frank. The settlement date and time of both transactions are aligned.
Process in PEXA
PEXA supports this scenario by facilitating a 'Transfer by Direction' sometimes known as a 'Directed Transfer'. The process works as follows.
The Vendor's (Developers) Representative creates a Workspace and invites the Purchasers (Frank's) Representative into the Workspace.
Frank's Representative joins the Workspace. Franks' Representative invites the Purchasers (Jenny's) Representative into the Workspace (or if they happen to also be (Jenny's) Representative they simply create Jenny as an additional Incoming Proprietor and confirm they act for her at that time).
Frank's Representative creates a Transfer where Frank is the named Incoming Proprietor and the Developer is the named Proprietor on Title.
Jenny's Representative creates a second Transfer where Jenny is the named Incoming Proprietor and Frank is the named Proprietor on Title. The Transfer from Frank to Jenny is placed after the Transfer from the Developer to Frank in the order of Lodgement.
PEXA automatically recognises that for 'Transfers by Direction' the Incoming Proprietor of the preceding Transfer in a sequence of Transfers will be the Proprietor on Title in the trailing Transfer.
In the PEXA Financial Settlement Schedule, the Developers Representative adds a Disbursement line item to the Developer (who for simplicity in this scenario owns the property outright) for $350,000.00.
Similarly, Frank's Representative adds a Disbursement line item to Frank for $50,000.00.
The Representative for Jenny adds a Financial Settlement Schedule Source line item for $400,000.00.
At Settlement PEXA will disburse $350,000.00 to the Developer and $50,000.00 to Frank.
If Jenny had purchased the apartment from Frank for $300,000.00, Frank's Representative will have had to add a Source line item for $50,000.00. Frank will have had to raise the necessary funds to support the transaction