A Comprehensive Guide to the Contract of Sale
When purchasing a property, many things happen before the buyer and the willing seller can come to an agreement and complete the sale process. There will be discussions over price, the condition of the property and other compromises both parties must agree on. Once all issues have been resolved the agreement will then be documented by means of the Contract of Sale.
What is a Contract of Sale?
A Contract of Sale is a document negotiated through a licensed conveyancer or qualified solicitor. Using an experienced professional is important to ensure the successful completion of the transaction. Complicated situations can arise where solicitors can negotiate on behalf of the parties to ensure the contract complies with the law. Once the contract is signed by the parties it is legally binding and the buyer can provide a deposit.
Who Prepares the Contract of Sale?
The contract is always prepared by a qualified solicitor or conveyancer and reviewed by the other party’s solicitor or conveyancer. The preparation of a Contract of Sale depends on how the property is sold and the complexity of requirements.
If a property is sold privately, the real estate agent creates the contract that the seller uses to make an offer. Therefore, it is crucial to choose a real estate agent with experience drafting solid contracts.
What Will You Find in a Contract of Sale?
There are a couple of things that should be found in a Contract of Sale. These include:
- The vendor and buyer’s name, address of each party and that of the property.
- The amount to deposit, due date and payment terms and conditions.
- The property price.
- The property settlement date (usually 30-90 days) and any conditions found which may require further inspections or finance.
- Availability of property as ‘vacant possession’ or ‘subject to a lease’.
- Household fixtures like carpets, curtains and furnishings.
- Any exclusions from the sale.
- Certificate of title details.
- Warning of the need for a smoke alarm on the premises.
- Problems with the mortgage or lease agreement.
Keep in mind requirements differ from state to state, but if you are unsure of what is allowed you should consult an expert. This is a legally binding agreement that you do not want to make mistakes with. Once it has been signed there are no provisions to undo it.
As a vendor or buyer, once you are happy with everything on the Contract of Sale you can sign on the dotted lines. But first, double check every clause and make sure the negotiations are carried out properly.
If you need assistance as a vendor or potential buyer, our property specialists are ready to help. Contact us today to get the experience and in-depth market knowledge from an award-winning real estate brand that will assist with all your property needs.
Disclaimer: The information provided is for guidance only and does not replace independent business, legal and financial advice, which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. PRD will not accept responsibility or liability for any reliance on the blog information, including but not limited to the accuracy, currency or completeness of any information or links.