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The Contract of Sale

A residential property cannot be advertised for sale until a Contract of Sale has been prepared. The contract must contain a copy of the title documents, drainage diagram and the Zoning Certificate (s 149) issued by the local council. Property exclusions must also be included and a statement of the buyer’s cooling off rights must be attached. The draft contract must be available for inspection at the agent’s office. It is important that you consult your solicitor or conveyancer about preparing the contract to make sure that everything is in order.

Contract exchange

Exchanging sale contracts is the legal part of selling a home. There will be two copies of the sale contract: one for you and one for the buyer. You each sign one copy before they are swapped or 'exchanged'. This can be done by hand or post and is usually arranged by your solicitor, conveyancer or the agent. At the time of the exchange, the buyer will be required to pay a deposit, usually 10% of the purchase price.

The contract exchange is a critical point in the sale process:

• The buyer or seller is not legally bound until signed copies of the contract are exchanged.
• Buyers of residential property usually have a cooling off period of five working days following the exchange of contracts during which they can withdraw from the sale.
• If the agent arranges exchange of contacts, the agent must give copies of the signed contract to each party or their solicitor or conveyancer within 2 business days.
• The cooling off period can be waived, reduced or extended by negotiation.
• There is no cooling off period for sellers. Once contracts have been exchanged, sellers are generally bound to complete the agreement.
• There is no cooling off period when purchasing at auction.

Settlement

Settlement usually takes place about six weeks after contracts are exchanged.

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