When you buy or sell real estate, there is only one way to have both buyer and seller locked into a legally binding contract and that is through a Contract of Sale and a Vendor’s Statement (Section 32) signed by both parties. These legal documents need to be together for the contract to stand.
There are plenty of different terms and conditions throughout both documents. Like any contract you must read through every bit in details and seek legal advice from a conveyancer to ensure you’re not purchasing a problem. There’s only really one form of contract of sale, even though they may change a little in wording from here to there, though there are standard items that must be included.
Once you’re happy to go forward and you have your purchase price and settlement date sorted out, then all you need to do is fill in the contract. As this is a binding document, it’s best to be sure about the purchase. Though in Victoria, you have the three-day cooling off period if you have a touch of buyer’s remorse. The cooling off period is to the business day, so any offers signed between Wednesday to Friday will incorporate the weekend. Ensure you have added any special conditions, such as building and pest inspections or anything the purchase will be reliant on and use the finance clause to ensure you don’t buy a property and not get the loan to service it.
Once buyer and seller signs the contracts, there is what you call an exchange of contracts. This is when both legal entities representing buyer and seller are given the contracts and the process of the sale begins. Throughout the cooling off, conditional and settlement period, the conveyancers will liaise with each other and their clients ensuring they make sure everything is set to run smoothly until the transfer of the title.
This is the only way to have a legally binding contract to purchase property. There is no standard form such as a letter of offer or an intent to purchase, that would have a legally binding agreement between buyer and seller and always leaves the option for a seller to pull out any time. When you find your perfect property and want to buy, just make sure you do your due diligence and read through all the paperwork, get your conveyancer to go through thoroughly and make sure you’re not buying someone else’s problem.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.