Buying and Selling Properties in Australia

If you’re buying or selling an Australian property, you’ll be faced with a contract of sale. This legally binding agreement outlines the terms and conditions between the buyer and seller. However, navigating this document can be overwhelming if you’re unfamiliar with it. In this guide, we will provide you with everything you need to know about understanding a contract of sale when buying or selling a property in Australia.

What is a Contract of Sale?

A contract of sale is a legal document that establishes an agreement between the seller and buyer of a residential property. Its purpose is to protect the rights of both parties involved in the transaction. Before signing the contract, it is crucial to carefully review its contents to ensure you understand the terms.

What Does a Contract of Sale Include?

A contract of sale must include the following details:

1. The names and permanent addresses of the buyer and seller.
2. The address of the purchased property and any associated land titles.
3. The agreed purchase price.
4. The proposed deposit amount and the due date for payment.
5. The property settlement date.
6. Information regarding an independent property valuation.
7. Details about inclusions of fittings, such as carpets or appliances.
8. Relevant occupation certificates, if applicable.

It is essential to read the contract thoroughly before signing it, as once signed, the agreement becomes legally binding. If you need assistance, consider consulting a real estate agent or solicitor.

Goods and Services Tax (GST) on Property

When purchasing an established residential property, such as a house or apartment, you do not have to pay Goods and Services Tax (GST) unless the seller is registered for GST. The GST tax will not be included in the contract of sale.

Altering the Purchase Price

Once a contract of sale is signed, the purchase price cannot be changed. By signing the document, you have effectively sold or bought the property, and no further amendments to the sale price can be made. If you realize a mistake or need clarification, seek independent legal advice.

Legally Binding Agreement

A contract of sale is a legally binding document, and both parties are subject to its terms as defined by the law. If the terms of the contract are not met, you are protected by law.

Creating a Contract of Sale

Instead of a real estate agent, you will need to consult with a licensed conveyancer or solicitor to create a contract of sale. If you are buying a house, the seller will likely provide you with the contract. If you are selling a property, your real estate agent or mortgage broker can help you find a trusted solicitor within their network.

Cooling-Off Period

Buyers have a cooling-off period of three business days for private sales of residential properties. This period allows the buyer to consider the offer made by the seller. The cooling-off period begins from the date the buyer signs the contract, not the seller. If the buyer decides not to proceed with the purchase during this period, they must notify the seller via the seller’s agent.

Get Professional Advice from Lendstreet

If you need assistance with obtaining a home loan for your property purchase, Lendstreet can help. Our team of experts is available to answer any questions you may have and guide you through the process of buying your dream home. Contact us today to learn more about how we can assist you.

Frequently Asked Questions

What are the Three Stages of a Contract of Sale?

The three stages of a property sales contract are as follows:

1. Preparation of the document: This is the negotiation period that ends when both parties agree to the terms.
2. Contract birth: This occurs when both parties agree to the contract terms.
3. Consummation: This is the fulfillment of the terms specified in the contract.

Can I Back Out of a Property Sale?

As a buyer, you have a cooling-off period of three days to decide whether you want to proceed with the purchase of a property. After this period, you are legally bound to the purchase since you have signed the sales contract.

Who Prepares a Contract for Sale?

A licensed solicitor or conveyancer prepares the sales contract for a property and issues it to both the buyer and seller after negotiations have taken place.

How Can I Amend the Title to a Property?

To legally change ownership of a property, you should contact the Australian land titles office in the state or territory where the property is located.

Remember, when buying or selling a property in Australia, it is crucial to understand the contract of sale thoroughly. Seek professional advice from a licensed conveyancer or solicitor to ensure you are making informed decisions throughout the process.