Last updated 16 August 2016
It is advisable to have a solicitor peruse the contract. It may also be a good idea for a builder, architect or some other expert in the field to inspect the house to ensure that it is soundly constructed and to estimate how much repair work may be necessary after the house is bought. Alternatively, the contract may be made subject to a building and pest inspection condition.
Once agreement between the seller and the buyer is reached, the contract must be drawn up and signed. In Queensland, the real estate agent involved in the sale usually draws up the contract.
Ideally, a solicitor should read the contract before it is signed to ensure that the buyer’s interests are protected. The solicitor should be informed of any particular requirements that the buyer may have, together with details of any representations that may have been made about the property by the seller or the real estate agent. The buyer should inform the solicitor of any plans for further development of the property or if the use that the buyer will make of the property varies from its current use. Depending on the buyer’s advice, the solicitor may need to insert special conditions into the contract of sale to adequately protect the buyer’s interests.
For residential property in Queensland, as soon as both parties sign the contract and the buyer receives their copy of the contract of sale, both the buyer and seller are bound to the terms of that contract. Even though contracts for the sale of residential property in Queensland (other than contracts formed on a sale by auction and certain other limited exceptions) are subject to a statutory cooling-off period of five business days, buyers are ill-advised to sign a contract until they are completely satisfied as to the terms. Buyers should also be aware that if they take advantage of the statutory cooling-off period to withdraw from the contract, the seller is still entitled to retain a termination penalty of 0.25% of the purchase price.
There are standard forms of contracts of sale in Queensland. These forms are approved by the Queensland Law Society and adopted by the Real Estate Institute of Queensland. A buyer should not take the view that because a standard form contract is being used, everything will be straightforward. If a buyer is undertaking their own conveyancing, they will need to read the clauses of the contract carefully and be aware that failure to comply strictly with any time provision of the contract will give the seller a right to terminate. As time is of essence in the standard form contract, this will also impact on any termination rights that the buyer may have, if the buyer fails to act within any time limit specified in the contract.