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Making sure the contract of sale is right is critical

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Making sure the contract of sale is right is critical


So you have found the home of your dreams, the one you want to purchase, exciting times. The agent has probably given you an “Expression of Interest Form”, so you can submit an offer with your term’s conditions, time frames and price.  This form will now be used to create the contract of sale for you and the seller to sign and hopefully secure the property.

It is really important to ensure your personal details are exactly as they should be on the contract including any middle names as this can impact on your finance application.

It is also super important to ensure that the contract has all the terms and conditions of your offer.

Below are the pages in the contract that you need to double check to ensure all of the details of your offer are correct. 

Page 2 in the contract

Ensure your personal details are correct (As it appears on your license or Passport) and address. Ensure middle name is included.

If you have already chosen your solicitor/conveyancer please have the agent complete under “BUYERS SOLICITOR”. If you are having trouble finding a solicitor, please let your agent know, they will be able to  point you in the right direction to obtain a solicitor.

Page 3 in the contract

  1. Purchase price: This is the amount you are prepared to pay for the property to be purchased. This may go onto negotiations and you will be asked to initial any agreed price changes.

  2. Deposit: By QLD Law an agent cannot hold more than 10% of the purchase price as a deposit. It is a good idea to put down as much as you can manage up to 10% as this shows good intent to the seller and may be taken into account when considering your offer.
    For example: Initial deposit $5,000 to be paid within 48 hours day of the dated contract. Balance deposit (if any) $20,000 to be paid, most common date to be paid on contract becoming unconditional or within 48 hours of contract becoming unconditional.

  3. Terms: Finance/Pest & Building

  4. Finance Amount: Should read as “Sufficient to Complete purchase”

  5. Financier: Should read as “Buyers Choice”

  6. Finance Date: Typically "14 Days from Contract Date" but can be altered to suit your timeframes

  7. Building and/or Pest

  8. Inspection date: Typically "14 Days from Contract Date" but can be altered to suit your timeframes

  9. At the top of this page is also a section for “Excluded Fixtures” and “Included Chattels”.  If you and the seller have agreed to leave any items at the property (i.e. furniture) this will be included under “Included Fixtures”.  If there is anything the seller is taking with them that would normally be considered to stay with the property these items should be noted under “Excluded Chattels”.

Page 5 (Page 5 House Contract/Page 6 Unit Contract)

  • Special Conditions: This is the place to ensure any special conditions you require are included. Special conditions can include the need to sell your current property or if you are buying into a Body corp situation you might want an approval to bring your pet.

  • Settlement Date: To be entered as per your required timeframes that suits both seller and purchaser. Typically "30 Days from Contract Date".

Page 6 (Page 6 House Contract/Page 7 Unit Contract)

Signatures and cooling off period/penalty.

As the buyer you are the first to sign and your agent will explain the cooling off termination which can be found above your signature on page 6. A 5 business day cooling off period applies to any real estate purchase in QLD. This allows the buyer to change their mind and runs separate to your other conditions. This can be waived by the buyer.  Also worth considering to strengthen your offer.

A termination penalty of 0.25% of the purchase price applies if buyer terminates the contract during 5 business day cooling off period because they have changed their mind  (i.e Purchase Price $685,000 – Cooling Off Penalty if terminated $1712.50 to be paid by the purchaser).

 
Terms and Conditions

Your agent will take you through and make you aware of your rights and risks of entering a contract of sale. Specifically 8.1 The property is at the buyers from 5pm on the first business day after the contract date. (i.e: Please be aware that the property is now at your risk and we strongly recommend that you obtain insurance advice and take out appropriate insurance immediately.  Such insurance may include but is not limited to public liability, building and contents and any other insurance recommended by your insurer to protect your interests). This is approved by The Real Estate Institute of Queensland limited and Queensland Law Society.
 

Once all these steps have been covered, the agent will present the contract to the seller. Negotiations may take place over price, terms and conditions, deposit and/or settlement time frames. Once both parties agree and the seller signs the contract, the contract is then dated, and we have a complete contract ready for execution.

All dates including finance, settlement, etc. run from this date which can be found at the top of page 1 “Contract Date”.

Congratulations you now have a contract of sale on the property and will move forward to satisfying all your terms and conditions and moving forward to settlement.
 
At this point your agents admin team will forward a copy to:

  • The purchaser

  • The seller

  • Both solicitors (seller's solicitor and purchaser's solicitor)

Once the sales administration team has executed the contract to the solicitors for both parties, it is the solicitor's duty to keep you informed of all progress to ensure all critical dates are met.
 
Arrangements should now be taking place for you to organize Building & Pest Inspection and finance through your mortgage broker or bank. Ensure your deposit is paid to the agents trust account at the times outlined in the contract of sale.

Please keep your agent in the loop and up to date with your inspections and progress with finance.

Last but not least, First National Palm Beach, The Pines and Burleigh would like to take the opportunity to thank Jane CraigRachel MottAlison Harris and Kerrie Penhall for being our Sales Administration  guns! Their hard work and eye for details are impeccable.

 

by Dale Harris

Making sure the contract of sale is right is critical
Thursday 28th May, 2020
First National Burleigh Principal & Licensed Real Estate Agent
M. 0401 009 197 | E. dale@burleighrealestate.com.au

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