CONTRACT OF SALE
When you find a property you like, you can make an offer to buy it.
Ask the seller’s agent how offers are to be made. Usually, it will be by:
- making a verbal offer
- filling out a form with your written offer
- completing the contract of sale provided to you by the seller’s agent by inserting your offer.
If you make a verbal or written offer, the seller’s agent will formalise your offer into a contract of sale and present it to you to sign.
The contract sets out:
- the price you are offering for the property
- details of when you will pay your deposit
- the time and date of settlement.
The contract only becomes binding when you and the seller have both signed it.
Before signing, take a copy of the contract away and discuss it with your solicitor. Don’t be pressured into signing a contract without seeking legal advice first.
A cooling-off period of 5 days applies to contracts for residential property. You are free to change your mind during this time. This does not apply if you buy at auction.
Paying the deposit
Once the contract becomes binding, you will need to pay the deposit. Follow the conditions set out in the contract—normally, you’ll need to pay within 2–3 days.
You might be asked to pay a partial deposit when you make the offer. This does not guarantee the property will be yours. The seller can still choose to reject your offer. If they do, you will get your deposit back.
Your contract might be subject to:
- whether you get finance
- a building and pest inspection
- if you can sell your existing property.
You must check to make sure these conditions are in the contract when you sign it. Otherwise, they won’t be legally binding. This is your responsibility.
If you’re not sure about anything, ask your solicitor to check it before you sign.
A contract of sale must have a warning statement in it. This statement must appear directly above the place where you sign the contract.
The warning statement must say:
The contract may be subject to a 5 business day statutory cooling-off period. A termination penalty of 0.25% of the purchase price applies if the buyer terminates the contract during the statutory cooling-off period. It is recommended the buyer obtain an independent property valuation and independent legal advice about the contract and his or her cooling-off rights, before signing.