Signing your Contract of Sale.
When you’re in the stages of negotiating buying your home, there’s so much to consider.
Along with whether or not the bank will lend you the money, you also need to ensure you know what you’re signing in the house contract.
I recommend you ask the real estate agent for a copy of the contract and have a solicitor or conveyancer review it, while you are in the process of making an offer.
Your solicitor will thoroughly review the contract for you, but it’s important you also take a good look.
Make sure the contract has your full and complete legal names on it (including full middle name) and correct spelling as shown on your passport and drivers licence.
The finance date must be achievable with your lender and we can advise you of this and your solicitor can assist you with a suitable settlement date.
Many buyers, especially first home buyers, can be intimidated by a contract of sale. To help familiarise yourself with it before you make an offer, I got a copy of the REIQ ‘Contract for Houses and Residential Land’ (fifteenth edition) which is what we use here in QLD. I have made some notes to give you an overview of a few key sections. Please check with your solicitor regarding your own contract before you sign it. You can download this for free here.
I personally consider these terms and conditions when I am signing a contract of sale (please consult your solicitor before signing any contract):
Finance date (a must to include)
You will need to include a date, as to when you can get your home loan ‘unconditionally approved’. The date is usually 21 days after the date you sign the contract and as your mortgage broker we can advise you on this.
It means that if for some reason your home loan is not approved, you may choose to terminate the contract within the contracted finance period and can usually get any deposits you have paid refunded.
If a short finance period is part of your offer, then 7 to 10 days is acceptable, again, as long as you check this off with us first.
Settlement date (a must to include)
Settlement is the day when ownership of the property officially transfers across to you. Generally this is 2 weeks from your finance date (unconditional loan approval). You solicitor can assist you to find a suitable settlement date.
Building and pest (a must to include)
When you go to make an offer on a property, you will need to order a building and pest inspection. Including a building and pest condition protects you and gives you the option to terminate the contract if there is an issue with the property that can’t be fixed, you are not comfortable with or you can’t reach a negotiated price reduction on.
You also need to include a date for when the building and pest period finishes which is usually around 10 to 14 days after signing the contract.
Property to be professionally cleaned by seller prior to settlement
Surprisingly the vendors are under no obligation to have the property professionally cleaned when they vacate, which means come settlement day they can leave the property dusty and dirty. I highly recommend you request for a professional clean to be a part of your offer to avoid any nasty surprises.
Before the property settles, you will want to inspect the property to ensure it is in the same condition as you expected it to be.
If there are no services like power, water, electricity or internet already connected
Ask for access to the property to arrange connections once your home loan is unconditionally approved and you are going ahead with the purchase.
The longer the property has been vacant the more issues you will have getting services connected.
Don’t forget WiFi can sometimes take up to 4 weeks to connect.
Arrange early access to the property for any work
You may want to get tradespeople into the home early before settlement, for example to get floor boards polished, walls painted, solar panels cleaned etc.
This can only be done once your home loan is unconditionally approved / past your finance date.
Fixtures to remain in the property
If there are any items around the property that are included as part of the sale, these need to be listed. Common ones are light fittings, dishwasher, sound system or the cubby house out the back.
Contract of sale
Here is where you will find these terms and conditions in the Real Estate Institute of Queensland’s ‘Contract for Houses and Residential Land’ :
- Finance date – page 3
- Building and pest date – page 3
- Settlement date – page 5
- The other conditions are usually listed on page 6, under ‘Special Conditions’.
If you want to see my overview of the REIQ ‘Contract for Houses and Residential Land’ (fifteenth edition), you can download this for free here..
It is important that you talk to a solicitor or conveyancer about the conditions you are requesting along with your offer, before you sign the contract of sale. A solicitor will be able to advise you on the exact wording of the conditions to include and their implications.
If you don’t have a solicitor check the contract of sale before you sign it, make sure you have them check it as soon as possible.
This advice is general in nature and is based on my personal and professional experience as a mortgage broker. Please consult your solicitor or conveyancer.