You’ve found your dream home and the Vendor has accepted your offer. The real estate agent will usually give you a Contract of Sale which both you and the Vendor must sign to make the sale legally binding.
This article explains what to do with the Contract of Sale and some of the common conditions it may contain.
|
Get Legal Advice
|
Once you have had verbal acceptance of your Offer, you first step should be to engage a solicitor or conveyancer to act on your behalf. He or she will check and explain the Contract to you, and may recommend changes to the Contract before you sign.
Most States have a standard Contract of Sale. The specific terms will vary from State to State, but typically the Contract of Sale will contain the following information:
|
- The name and address of the Vendor.
- Description of the physical dimensions of the land.
- A list of any Chattels included in the sale. Chattels are items not attached to the property, such as curtains. Fixtures are things like light fittings that are part of the building.
- The purchase price divided into the deposit and the balance. The amount of deposit required varies depending on which State you are in. In some States a deposit is not a legal requirement.
- Settlement details.
- Building inspection reports.
|
|
General & Special Conditions
|
Contracts may contain two types of Conditions. General Conditions are written into the standard Contract of Sale and cover issues such as:
|
- loss or damage before settlement;
- what happens if there is a breach of the contract;
- how money is paid, etc.
|
In addition, the Contract may contain Special Conditions. These are extra conditions that are put in the contract by you or the Vendor. They can be about anything to do with the property. For example:
|
- that the contract is subject to you obtaining finance;
- that there will be penalties for a delay in the settlement;
- that the sale is subject to a tenancy etc.
|
You should also check the Contract for any Restrictions, which will restrict the use of the property, or Easements. An easement is an interest in land which grants a person the right to use the land of another. The most common form of easement is where a Government authority has the right to run electrical mains or drainage through private property. Another example is where a neighbour has the right to use the driveway of an adjoining property. It is important to check for any registered easements (which appear on Title) and unregistered easements (private agreements).
If you are buying off-the plan, the Contract of Sale should contain a sunset clause. This enables you to cancel the Contract if the Plan or development is not completed by a certain date.
|
Cooling-Off Periods & GST
|
The contract may contain information about a cooling-off period. During the cooling-off period you may change your mind and withdraw from the purchase. A cooling of period is not offered as a general condition in all States, and the length of the cooling-off period may vary. Check your Contract of Sale carefully for details.
Finally be sure to check whether the property is being sold inclusive or exclusive of GST. Failure to ensure that the Contract clearly addresses GST can prove very costly later on.
|
More information
|
For more information on the buying process, and what happens once your offer is accepted, click here.
|
Share
