What should I check on the contract before I exchange it?

Firstly, you should seek proper legal advice for your particular contract.  However, generally:

1.      At the time you pay your deposit and exchange contracts, you MUST receive a contract signed by the vendor.  Ask the real estate agent to verify for you that it is in fact the vendor’s signature, as the vendor does not have an identity or an address in Australia known to you.  Do not be pressured by the agent to simply accept it.

 

2.      Is the property being sold with vacant possession?  The contract does not mark the “Vacant Possession” box?  Do you know if there are tenants in the property?  If you want to move in on settlement, the Contract should be marked “Vacant Possession” and the agent should notify the tenants to vacate.

 

3.      Is there a cooling off period? If you are required to provide a Section 66W Certificate, there is no cooling off period. This means you are bound by the contract when you sign it.

 

4.      What is the deposit marked on the contract? Even if you negotiated with the agent to agree to a 5% deposit, if the contract states a 10% deposit, the vendor will be entitled to call on the full 10% deposit if you breach the contract.

 

5.      Is the property being sold with blinds, built in wardrobes, dishwasher, fixed floor coverings, light fittings, a stove, a dryer and air conditioning etc? The contract needs to be marked according to what is being sold with the property.

 

6.      Make sure you get confirmation from the agent that GST is not payable on top of the purchase price.  Get the agent to mark the appropriate box at the bottom of the front page.

 

7.      Is the Contract subject to Land Tax?  Make sure you get confirmation from the agent that Land Tax is not payable on top of the purchase price.  Get the agent to mark the appropriate box at the bottom of the front page.

 

8.      You must ensure that you have your finance in order well before settlement.  Speak to your lender now if you have not already.

 

9.      You generally buy the property as is, in its present condition, and cannot make any claim as to any defects.  You cannot rely on anything the vendor or the agent have told you or written to you about – in short, if it is not mentioned in the contract, it’s not binding.

 

10.  Check the Planning Certificate for permissible uses of the property.

 

The above are not the only considerations. If you require any information in relation the above, please give Nas Hanafi of Lion Legal a call on (02) 9251 2722.