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Contract of Sale

Contract of sale

Successfully buying property involves much more than a vendor and buyer simply agreeing to the sale. 

Before you ever even make an offer or attend an auction, you will need to acquire a copy of the contract of sale and review it thoroughly. Typically, you will also need to negotiate changes to this contract to ensure your interests are protected. 

From back-and-forth negotiations regarding any inclusions, settlement dates, the agreed condition of the property at handover and more, many compromises may be required to complete the transaction. 

In this guide, we’ll take a closer look at what a contract of sale is, who prepares them, what they include and why a review from a legal expert is strongly recommended before signing. 

What Is A Contract Of Sale? 

A written, legally binding, bilateral contract (signed by both the vendor and buyer), a contract of sale is used for the purchase and sale, exchange, or other conveyance of real estate. 

The contract of sale is provided to potential buyers for review by the real estate agency or individual overseeing the sale. 

Until signed, the terms and conditions of the sale outlined in the contract can be negotiated. This is typically done once an offer has been accepted and with the assistance of a legal representative such as a conveyancer or solicitor. 

Once both parties have agreed on all terms and signed the contract, it is considered ‘exchanged’ and legally binding, committing both the vendor and the purchaser to the sale. 

Who Prepares The Contract Of Sale? 

A real estate contract of sale can be prepared by a solicitor, conveyancer or real estate agent. The strength of the contract will rely heavily on the experience level of the individual drafting it. 

As some sales or property types will be more complex than others, it is vital that regardless of whether you are the vendor or purchaser, you have your solicitor or conveyancer review the contract in detail. 

This will ensure nothing has been missed and that you understand exactly what you are agreeing to concerning the sale. 

What Is Included In The Contract Of Sale?

Exactly what is included in a property’s contract of sale can differ. However, there are several details that must be included. 

These include:

  • The names and addresses of both the vendor and purchaser
  • The address of the property being purchased and the land dimensions
  • A description of the home (unless a vacant lot)
  • The deposit amount and due date
  • The agreed sale price
  • The date of the property settlement and whether there are any conditions such as the sale being contingent on securing finance or any additional inspections. Each condition must be listed in a numbered format and initialled by both parties.
  • Whether the property is available as ‘vacant possession’ or ‘subject to a lease’. The latter applies when tenants are renting the premises and the rental term is not yet finished. 
  • Any other property that is being sold as part of the deal
  • Inclusions and exclusions. Also known as the ‘chattels list’, this covers things such as fixtures and fittings, carpets, curtains etc that may be left or taken as agreed.

It should be noted that each state and territory may have different requirements for what is necessary to include in a contract of sale, so it pays to be across this. 

In some states and territories, the contract of sale must be accompanied by additional documentation and disclosures such as:

  • A property certificate (title search)
  • Drainage diagrams
  • A planning certificate issued by the local council
  • Any dealings on the lot relating to an easement, restrictions on the use of land or positive covenant
  • A notice regarding smoke alarms 
  • Declaration of whether there is any loose-fill asbestos insulation present (where applicable)

Contract inclusions

The Role Of A Conveyancer Or Solicitor

As a legally binding document with a host of terms and conditions and legal jargon to make sense of, it is strongly recommended to have a conveyancer or solicitor review it before signing.

Engaging the help of these legal experts will ensure you understand the various clauses included within the contract. They can also advise on any that they feel need changing and help you to negotiate these or any changes you request directly.  

Remember, you’ll require a solicitor or conveyancer to manage the sale beyond the exchange of contracts and through to settlement in any case. Taking this into account, engaging one early in the process to read your contract of sale simply makes sense and can save you a lot of potential issues further down the line. 

Potential Contract Of Sale Issues

When reviewing a contract of sale, it’s essential to remain aware of any potential warning signs that could complicate, delay or derail the sale. Typically your conveyancer or solicitor will alert you to these and advise on the next steps. 

These warning signs may include:

  • A seller who displays unreasonable behaviour during negotiations regarding the property price or contract terms
  • The lack of necessary disclosure materials
  • A property valuation that falls below the asking price. To preempt potential issues, buyers can opt to obtain an upfront valuation from an impartial property valuation expert.

Having your legal representative verify the possession rights of the property is also crucial. A rented property cannot be offered with vacant possession if the tenant’s lease contract is still active. 

If you intend to live in the property, you’ll need to wait until the tenant’s contract is complete, however, you are, of course, entitled to all rental earnings until that time once settlement has occurred. 

Enjoy Uncomplicated Property Purchasing With Stop Renting Perth

At Stop Renting Perth, we recognise that buying property and making sense of all the paperwork, including the contract of sale can be overwhelming. 

Combined with the stress of finding a property, organising finances and negotiating a sale, buying a home can quickly become an arduous process that is far from enjoyable. 

However, when you opt to build instead of buy, through one of our house and land packages in Perth, the experience can be quite the opposite with comprehensive support provided from start to finish. 

Highly experienced, we supply a qualified conveyancer, connect you with a finance expert and ensure all paperwork is done on your behalf. 

We liaise with the land developers on the contract of sale and produce the building contract ourselves, ensuring everything is expertly managed and tailored to your needs. 

By shouldering the bulk of the load regarding contracts, applications and documentation, we provide you with a seamless, stress-free experience. 

Uncomplicated property purchasing with house and land packages

Why Build Over Buy?

If saving a deposit seems impossible or you’re feeling disheartened about how many compromises you’ll need to make to buy a home, we’re here to help. 

With competitive lending options to suit your circumstances, you may even find you qualify for one of our house and land packages without a deposit or savings set aside. 

Our goal is to see you escape the cycle of renting sooner, giving you a proven road map for success, removing common barriers and showing you how to achieve home ownership. 

With over 70 home designs to choose from and land available in suburbs all over Perth, you can enjoy living in a brand-new home, built to your specifications and in your chosen area. 

Also able to advise and assist with available government grants and schemes for first-home buyers, we help your funds go further for optimal value and return on investment. 

To learn more about how we work or to book a free consultation regarding our house and land packages in Perth today.

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We’re here to help, so let’s get started! it’s time to stop renting and start taking steps towards home ownership.