The contract of sale is the most important document in the process as it outlines the terms and conditions as agreed on by the vendor and you. It must be in writing and signed by the parties involved.
The contract is normally prepared by the vendor’s solicitor. However, details such as the sale price and settlement date are often completed when the parties sign the contract of sale.
Provided that the vendor agrees, the contract may be conditional such as ‘subject to finance’, ‘subject to a building inspection’, ‘subject to the sale of the purchaser’s property’ etc. The sale will only proceed if the conditions are met. For example, if you are selling a property to finance your purchase and the contract of sale is ‘subject to the sale of the purchaser’s property’ the contract sale will only go unconditional when you have sold your property.
An unconditional contract simply means that the sale is not dependent on any terms and must proceed. If you decide to withdraw once the contract has become unconditional, the vendor would be entitled to recover any financial losses it sustains. As mentioned the vendor’s losses could exceed the quantum of the deposit and could lead to litigation. We highly recommend that you seek legal advice prior to signing an unconditional contract. At Gleeson and Co lawyers, we will review the contract of sale free of charge.
You are entitled to bring the contract to an end provided that it is within the cooling-off period, i.e within 3 full business days of signing the contract of sale. Unless the property was purchased at publicly advertised auction, in which case the cooling-off period doesn’t apply. You will be entitled to a refund of any money paid under the contract with the exception of $100 or 0.2% of the purchase price (whichever is greater). If you would like to make use of the cooling-off period, you should contact us as soon as you have signed the contract.
A contract of sale may be relatively simple, however, a standard contract will normally include the following:
- Names of the parties
- Description of the property
- Estate agent’s name
- Legal practitioner’s name
- The sale price
- Deposit paid
- Balance owing
- Title particulars
- Inclusions of any chattels
- Subject to finance
- General conditions such as financing information, GST and settlement requirements
- Whether the property is subject to a lease
- Special conditions such as building inspections
- Date of settlement
If you’re purchasing a property we offer free pre-contractual advice. Simply email the Contract of Sale and Section 32 to email@example.com and we’ll let you know if it’s safe to purchase the property.