What’s in a Contract of Sale?
- Written by NewsServices.com
There’s a lot to learn if you’re buying or selling a property for the first time. Try not to feel overwhelmed by all the paperwork, take your time, ask lots of questions and engage an expert property conveyancer to assist you! One of the most important documents that you will need to create, or review is the Contract of Sale. So, what is a Contract of Sale, what needs to be included in it, and what could its contents mean for your property transaction?
Drawing up a Contract of Sale or reviewing it if you’re the buyer of a property, is one of the first tasks your property conveyancer will usually perform for you. The Contract of Sale represents the agreed terms and conditions of the sale of a property. A good conveyancer will always ensure that their client understand the Contract of Sale and what it includes as well as what it means for them as the buyer or vendor of the property. It’s important that the Contract of Sale accurately represents the property that is being sold as well as the terms and conditions of the sale that have been agreed on by the vendor and buyer. Once the Contract of Sale has been signed and the deposit has been paid, the property is considered sold, so this is not a document to get wrong!
What is a Contract of Sale?
A Contract of Sale is a legal agreement between the seller and buyer of a property that outlines all the information that is relevant to the sale. It’s crucial that you review the Contract of Sale to check that its contents are accurate because once it has been signed it becomes a legally binding document. The Contract of Sale lists the terms and conditions of the purchase of a property that both the buyer and seller have agreed to. In most cases, both the seller and buyer of a property will engage a legal professional such as a property conveyancer to offer assistance and advice with the legal requirements of selling or buying real estate. In more complex cases, property conveyancers can step in to negotiate on behalf of their client to ensure that the Contract of Sale accurately represents their clients wishes in regard to the sale.
When do I need a Contract of Sale?
If you’re the vendor of a property you need to have a Contract of Sale prepared by the time you list your property for sale so that prospective buyers are able to review it in preparation for making an offer to buy your property. If you’re in the position of being the prospective buyer of a property you should ask to see the Contract of Sale once you’ve viewed the property a few times and established that you’re interested in potentially moving forward with making an offer to buy the property. The real estate agent should be able to supply you with a copy of the contract for you to review. You will need to read through the document carefully to make sure there are no terms and conditions that might put you off buying the property. The Contract of Sale is not a legally binding document until it has been signed.
How can a property conveyancer help with a Contract of Sale?
So which expert should you look to for help and guidance with preparing and executing a Contract of Sale? Engage a qualified and experienced property conveyancer as soon as you embark on the process of selling or buying a property. It’s vital to ensure that you have expert assistance available and that you are well prepared for the legal requirements of buying or selling real estate as it can be complicated and stressful, and mistakes can be costly. An experienced conveyancer, such as Jim’s Property Conveyancing Melbourne or Jim’s Property Conveyancing Brisbane, can help clients to prepare and verify the legal documentation that is a necessary part of buying real estate.
The Contract of Sale for the property will usually be prepared by the vendor’s property conveyancer and then will be checked and approved by the buyer’s property conveyancer. A qualified property conveyancer will also be able to assist you with any negotiations or amendments that you may need to make to the Contract of Sale.
What does a Contract of Sale need to include in it?
Broadly speaking, the Contract of Sale needs to include anything that is relevant to the sale of the property. If there are any terms or conditions that you don’t agree with as the buyer, you can negotiate with the vendor, or have your property conveyancer negotiate on your behalf. Here are some items that you can expect to see included in a Contract of Sale:
* The full names of both the vendor and purchaser of the property as well as the real estate agent’s name and the property conveyancers’ names;
* The address of the property being sold;
* The agreed sale price of the property, as well as the deposit amount that needs to be paid by the buyer;
* The agreed date of the property settlement;
* Whether the property is subject to a lease arrangement;
* The certificate of title for the land (including volume, folio, lot and plan details);
* Any goods sold with the land, such as fixtures and fittings, or any furniture items; and
* Special conditions that might affect the sale of property sch as loan approval or things like the sale of another property or a business that might affect the sale.
What to watch out for in a Contract of Sale?
Firstly, it’s crucial to understand that a Contract of Sale is a legal document, this means that as soon as you sign it you are legally bound to the agreement. The Contract of Sale will not be activated until both buyer and vendor have signed it, but it is worth noting that it is still legally binding with only one signature. The only way that a buyer can get out of this contract without potentially being penalized is if they revoke the offer before the vendor has signed it, or if the vendor rejects their offer.
As with any legal document, it’s important to ensure you have sought expert advice. Engage the services of a solicitor or property conveyancer to protect your interests and don’t sign the contract until you fully understand it and agree with its terms and conditions. It should be noted that Contracts of Sale can vary depending on which Australian state or territory your property is located in. Here are some things to watch out for in a Contract of Sale:
* Review the special conditions carefully to ensure they don’t unfairly favour the vendor.
* Make sure that you have predefined reasonably foreseeable loss in the contract to ensure that you are protected in the event of late payments.
* Be wary of rate rises to ensure that what’s in your contract is in line with the prescribed amount.
How is the Contract of Sale finalized?
If you are the one buying the property, you will usually be the first one to sign the Contract of Sale. The Contract of Sale will then be submitted to the vendor with your offer to buy the property. The property conveyancers for both parties will assist with legal advice, research and verification, as well as any necessary negotiations. The property will be considered to be sold once the purchaser and vendor have both signed the Contract of Sale and the purchaser has paid the deposit.