Buying a House
Residential Contract of Sale
The most common method of purchasing a house, an apartment or vacant land in Queensland is by private treaty with the Seller.
Unlike a sale by auction (where the contract of sale is usually unconditional, and the price is determined by a competitive bid, provided it meets or exceeds the reserve price, which is usually set by the Seller), in a sale by private treaty, the Buyer will negotiate the terms of the standard contract of sale (‘Contract of Sale’) (being, most commonly, either the ‘REIQ Contract for Houses and Residential Land (14th Ed)’ for houses and land, or the ‘REIQ Contract for Residential Lots in a Community Titles Scheme (10th Ed)’ for units) with the Seller (usually via a real estate agent acting for the Seller), in relation to terms regarding the Contract Price, the Deposit Amount, the Settlement Date and any Special Conditions (for example, whether the Contract of Sale will be subject to the prior sale of the Buyer’s existing property).
The Contract of Sale will also usually be conditional on the Buyer obtaining satisfactory Finance Approval and Building and Pest Inspection Reports.
The Contract of Sale includes a number of technical and legal terms and conditions which govern the conveyancing process and outline the parties’ respective contractual rights between each other, which are contained in sections called the ‘Terms of Contract’ and the ‘Reference Schedule’. The standard Terms of Contract apply to the terms and conditions of the particular purchase agreed between the parties, as set out in the ‘Reference Schedule’.
The Reference Schedule will contain terms relating to inter alia the particulars of the Property, the Contract Price, the Deposit Amount, the Settlement Date, whether the Contract of Sale is subject to satisfactory Finance Approval and satisfactory Building and Pest Inspection Reports, any Special Conditions and whether the are any other matters affecting the Property. Buying a property can be a stressful process and getting a proper grasp of the Contract of Sale can add to that pressure.
The Contract of Sale is like any other legal contract, it is formal, technical and lengthy, and once properly executed, will bind the parties to the agreement (and allow the parties to sue each other on the Contract of Sale if there are any breaches). Accordingly, particular care should be taken when completing the Reference Schedule, to ensure that the information detailed in the Reference Schedule is true and correct in all respects. It can be difficult and costly to correct any such mistakes.
Additionally, special conditions should be carefully drafted to reflect the true intention of the parties, as special conditions will usually override the standard Terms of Contract to the extent of any inconsistency. Given that the family home (or investment property) is usually one of our most valuable assets, it is worthwhile engaging an experienced conveyancing lawyer when purchasing a property.
This commentary is of a general nature only, containing nothing more than some general information for the reader. It is not intended to be legal advice, nor cannot it be relied upon as legal advice. To this end, please read our Website Terms including the disclaimer contained therein carefully. Laws, rules and principles may be subject to sudden and unexpected changes and you should always consult a lawyer about your specific circumstances.