- A contract of sale is a legal requirement when you buy or sell a house in Australia. The process of documentation may differ from suburb to suburb.
- In order to prepare the contract of sale, you will have to prepare a licensed conveyancer or a qualified solicitor.
- There are a lot of ways to find a good conveyancer or a solicitor. Either of them can talk to the real estate agent and we can help you to find the right real estate agent. At Raine and Horne, Land Victoria, we have a team of professional real estate agents who can guide you in buying and selling land.
A Complete Guide
A contract of sale includes everything pertaining to the property such as name, address of the buyer, seller, conditions of sale, and inclusions. It contains all the relevant information. Once it is signed, the buyer and the seller are legally binded.
Buying or selling a property is not a small task and a contract of sale is at the center of the whole process. It is the responsibility of the vendor to have the contract for sale prepared before listing the house for sale.
In some states, the real estate agents provide a basic contract of sale with terms and conditions agreed later by the solicitor. While in other cases, the contract of sale is prepared by the solicitor from the outset.
In order to understand the entire process, speak with your real estate agent. In case you do not have hired a real estate agent, contact Raine and Horne Land Victoria. Our team will assist you.
As a property buyer, when you find yourself a suitable property and get your financing information in place, it means it is high time to enter the negotiation stage. At the same time, it is important to know that you are well represented legally to look over the contract of sale. Also, work out the finer points with the owner of the property, the real estate agent, and if there is any other representative party involved.
To ensure the sale of a property meets all the current Australian legal requirements, it is important to have a contract of sale.
The contracts might seem a bit daunting because these are to be filled up to the brim with some clauses and fine printing. So, let us look into the contract of sale in a little more detail.
Who Prepares the Contract of Sale When Buying Property?
The contract of sale is always prepared by a qualified solicitor or by a licensed conveyancer. It is checked by a solicitor or conveyancer representing the other party. This is done to ensure that both the sides are protected in the transaction process.
What Does Real Estate Contract of Sale Include?
The information given in the contract of sale should leave nothing for assumption or to chance. In fact, it should list all parties and their representatives including information related to the selling price and full address.
A contract of sale for real estate will also include financing, building inspections, or the terms if you can sell your property or not.
Here is the list of some factors that can be found in the standard contract of sale. Also note that these might differ from one state to another.
Important information in the contract of sale includes;
- The selling agent.
- The purchasing parts.
- Name of the seller.
- Price of the property.
- The initial deposit, payment terms and conditions, and the details of loan amount.
- The address of the property.
- Improvements (if any) to the property.
- Any exclusions from the sale.
- Anything else included in the title.
- Any household furnishings, fixtures, and chattels.
- The cooling off period as stated by the state.
- The property settlement date, period, including penalty rates.
- Warnings of the need for smoke alarms.
- Date of the offer.
- The certificate of title information.
While every property contract will cover some standard terms, based on the property you are buying or selling, special conditions of sale might also be included. All these conditions will be included in the contract of sale. Also, it will have the ability to override the standard terms and conditions as required.
Before you sign anything, make sure you understand the stated terms and conditions.
The vendor is usually responsible for attaching disclosure documents, warranties, conditions of the sale, and notifications of any defects.
These might include the following;
- Plans for sewer lines.
- Zoning and property certificates.
- Plans of the land including sub-division, if applicable.
- Restrictions, covenants, and easement documentation.
- Home warranty insurance certificate.
- A cooling off notice period.
While these features might not look so important, failure to include such documentation might give the buyer the right to cancel the contract of sale within the set time period.
Things That can be Negotiated in a Contract of Sale
Cooling-Off Period
The cooling-off period is waived when a house or a property is purchased through an auction. The cooling-off terms that related to private sales can also be negotiated.
This period can be longer or shorter or can even be removed from the terms of sale together.
From the perspective of a buyer, it is important to carry out any legal advice, building inspections and finance before the exchange of contracts.
If the cooling-off period is waived, a written certificate from the solicitor is important that indicates the effect and the nature of the terms.
Cancellation Fees
Any fees relating to the cancellation of the sale of a property can also be negotiated in the contract of sale.
Settlement Period
The period of property settlement between the exchange of contracts and the exchange of ownership and the title can also be negotiated between two parties i.e., the buyer and the seller. This period can also be shorter or it can also be longer to suit both parties.
The settlement period must take into account all the final legalities.
One can also negotiate the amount of the deposit and the method of payment before adding it to the sale of the contract.
Fittings and Fixtures
More fixtures and custom-built furniture pieces added to the modern homes have changed the definition of permanent fixtures. It is crucial for the seller to identify what the owner means by fittings and fixtures as it may or may not include home appliances such as sound systems, television, and fridges. Even though dishwashers are considered a fixture, these should always be noted for clarity.
Completing the Contract of Sale
When the contract is exchanged, the buyer and the seller must agree to it and sign all the copies of the contract.
If the agent is responsible for the contract document, make sure it is given to both the parties within two days.
On the Day of Contract Settlement
The day of settlement is the day when all the representatives of the parties including financers meet to exchange legal documents. This is the day when the following things take place such as;
- Final checks are performed.
- The payment of the purchase price is made.
- All relevant legal documents are exchanged.
One should definitely look into every aspect of the contract of sale document before taking any decision. In case you have any issues, contact our experts at RH Land Victoria.