7 Questions You Have About Your Residential Contract Of Sale

Article by Zoe Langenberg. This article was originally published on ibuildnew.com.au and has been republished here with permission.

We understand that when you are going through the process of purchasing real estate, whether it is a house and land package, townhome or apartment, there are lots of questions that you have. They probably pop up at the most inconvenient of times too, when you can’t record them down or ask anyone. 

We’ve answered some of the most common residential contract-related questions from homebuyers below.

If these questions spark any other queries, make sure you don’t hesitate to talk to one of our expert consultants who have been in the industry for years. You can call us 7 days a week on 1300 123 463 or reach out to us online.

What is a residential contract of sale?

A contract of sale is a term that is commonly used in the real estate industry to identify a legal document that sets out all the terms and conditions that the seller and buyer of real estate have agreed on. They are documented in a very clear way in a contract of sale which is then reviewed and signed by both parties. It is important to take your contract of sale extremely serious and have a professional review it, as it is binding.

What does a contract of sale have to include?

It is typical for a contract of sale to include the following:

  • The conditions of the sale (e.g.. financing information or additional building inspections)
  • The name of the parties involved
  • The address of the property being sold
  • The deposit that must be paid
  • The total sale price of the property
  • The date of settlement

An expert, such as a solicitor or a lawyer, will have an in-depth understanding of what should and shouldn’t be put into a contract of sale, so it is important that you always consult one when appropriate.

Who produces the legal contract of sale?

Always make sure that when you have a legal contract of sale written for you, that it is done by the correct people. Usually, the lawyer or solicitor of the seller will prepare the contract that outlines all of the terms and conditions that were agreed on, however, either lawyer can draw up the document. This will include the rules that the sale will have to follow, including; title transfer and settlement.

Once the lawyer of one of the parties has drawn up the contract of sale, the lawyer of the other party should review the document to make sure that the terms and conditions documented are in their clients best interest.

Who can and can’t produce a contract of sale?

Both lawyers & conveyances can draft up a contract of sale of real estate. It should be noted that Estate Agents are not authorised to draw up legal documents. The one exception is that Estate Agents are authorised to fill in the standard form sales contract if it is then reviewed by a lawyer.

Is there a standard contract of sale that is used?

Yes, there is a standard contract of sale that Estate Agents can fill out. The Contract for Sale of Real Estate has been in effect since 2008 and contains all of the standard terms and conditions of the sale of real estate, which helps provide consistency within the industry.

When does the contract come into effect?

The contract of sale comes into effect after both parties have signed the written contract. You should never sign a contract of sale before both parties have had it reviewed by their lawyers, because once it is signed, no changes can be made unless agreed to by both parties.

What happens if the buyer changes their mind?

The law, however, provides the buyer with a three day “cooling off” period which begins on the day the buyer signs the contract (even if the seller hasn’t yet signed). There are conditions to this cooling-off period however that should be considered. If you are not completely sure about your purchase you should not sure the “cooling off” period to consider your purchase. Making sure that you do sufficient research is the only way to be completely confident in your decision.

If you are looking to compare house and land package or land, having a chat with one of our expert consultants is a great place to start. Get in touch with one of our friendly property experts today about how we can help.

Call us on 1300 123 463 or email us on info@ibuynew.com.au

Published on 10th of November 2020 by Michelle Leftwich
Michelle Leftwich
Michelle Leftwich

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