What is a Contract for Sale of Land?
Before a property may be marketed for sale to prospective purchasers you must have prepared a valid Contract for Sale of Land. A Contract for the Sale of Land must have attached to it the following:-
- A Title Search which identifies the current owner and any dealing registered on title;
- Zoning Certificate (149(2) certificate) issued by the relevant Local Council;
- Drainage / Sewer Diagram;
- Special conditions – often drafted to protect the vendor and to cover any additional agreement with the purchaser;
- Residential Tenancy Agreement in the event the property is tenanted and is to be sold subject to such tenancy;
Once the Contract for Sale of Land is prepared:
Real Estate Agent:
The Contract for Sale of Land will be issued to your nominated Real Estate Agent for marketing to prospective purchasers.
The Contract for Sale of Land may be issued directly to the purchaser or his/her representative in the event it is a private sale.
What happens when the Property is SOLD?
Upon the sale price being negotiated with the purchaser, the following normally occurs:
- The Real Estate Agent prepares a sales advice;
- The Contract for Sale of Land will be altered to reflect the agreement between the parties (price, completion date, inclusions, exclusions)
- The Contract for Sale of Land is submitted to the Purchaser or his/her representative;
- If the parties agree with the terms of the Contract for Sale of Land, exchange of contracts will occur and the Purchaser pays a deposit, generally 10% of the purchase price.
Under the current form Contract for Sale of Land, the Purchaser receives a five (5) day cooling-off period. The Cooling-off period is for the benefit of the Purchaser only. In the event that the Purchaser does not proceed with the purchase then the Contract for Sale of Land will be rescinded and the Purchaser will forfeit 0.25% of the purchase price which will be retain by you (Vendor).
Once contracts are exchanged and unconditional (meaning the cooling-off period has elapsed) both parties are bound to the terms and conditions of the Contract for Sale of Land.
How long will it take to finalise the Contract for Sale of Land?
The standard time frame for a Contract for Sale of Land is 42 days (6 weeks) from the date of exchange. Exchange occurs when the Purchaser pays a deposit and enters into the Contract for Sale of Land with the Vendor.
Although the standard time frame is 42 days, this time frame may be shortened or extended by agreement between the parties. During the time between exchange of contract and settlement you must maintain your building insurance and the property.
Settlement may be effected on or before the due date as set out in the Contract for Sale of Land.
The purchaser is entitled to carry out a final inspection of the property prior to settlement and this will normally be arranged with the Real Estate Agent.
Upon settlement the purchaser pays the balance of the sale price which is applied to payout any Mortgage or Caveat on title and then the balance is paid at your direction.
Things to consider?
- If you are purchasing simultaneously as a result of your sale, please ensure you notify the Real Estate Agent and your Solicitor;
- If there is a tenant in occupation of the property, whether you wish the property to be sold subject to such tenancy or sold with vacant possession.;
- You have clearly disclosed all inclusions and exclusions on the front page of the Contract for Sale of Land;
- All alterations and additions to the property have been disclosed.