Key facts about common real estate contracts

real estate contracts

When it comes to contracts, it’s vital to understand the finer points and know how they apply. Here’s a quick, informative read to fill you in on the most common types of real estate contracts in Australia.

These are the three most frequently used real estate documents in Australia:

  • Exclusive Sale Authority: for selling a property.
  • Exclusive Auction Authority: for auctioning a property.
  • Exclusive Leasing/Management Authority: for renting a property or appointing an agent to manage it for you.

Each one gives permission for the agent to exclusively sell or lease an owner’s property.

Standard contracts for the sale of a property include much of the financial, planning and legal details that will determine if a buyer will go through with the purchase of your property. These can include any restrictions, details of the outgoings such as council rates and land tax, any building approvals or notices about proposed works, how any relevant planning schemes affect the land, and proof of the seller’s ownership of the title.

The fine print: Fees

“A very useful piece of information is that agents’ fees and marketing expenses are now deregulated,” said Ash Brown, Director of One Agency Orange.

“Agents have to inform sellers and landlords about what their commissions and outgoings are before any authority is signed. These are open to negotiation too, so make sure you’re happy with what you’re signing.”

Your agent should be upfront with you about their fees. Make sure you only deal with agencies that have a track record of honesty and integrity and who answer your questions with full disclosure. 

Get it in writing

If you place an offer as a buyer, counter an offer as a seller or say you want a specific clause in the contract, none of it is legally binding unless it’s in writing. When it comes to the sale of property, a conversation is not legally enforceable.

Once it is in writing and you’ve signed the contract, then everything in it is legally enforceable. It’s so important to have your contracts drawn up by people who know real estate and its laws. Having a correctly worded contract can save you a lot of trouble and could also balance the outcome in your favour.

Real estate contracts vary by state

The details in these contracts vary from state to state in Australia depending on whether they’re for an auction, a private sale, multiple listings or leasing.

“An experienced, qualified local real estate agent can walk you through the information you need to have,” says Ash Brown. “If there are any potential difficulties, they can flag those for you so you have time to get legal advice and can avoid any costly or complicated interruptions to the process.”

Use a conveyancer

It can be tempting to think the transfer of an interest in a property from one person to another is a simple matter of working your way through the paperwork process and how hard can that be, right? Quite hard. And you don’t want to make a mistake. These are complex legal documents that have to be correct.

For example, the property title needs to be thoroughly researched by someone who understands all the legal jargon and what a notice or order about rates or zoning is so you can be certain that no liabilities or encumbrances are being passed on to you, the new owner, and all the mortgage requirements are fulfilled.

Other issues can arise such as caveats or covenants attached to the property, illegal extensions that have not been approved, the property differs in size from what’s on the title, and damaged or missing inclusions at the final inspection.

You can use a solicitor instead of a conveyancer but it will cost you more. It is wise, though, to make sure the conveyancer you use has a solicitor on hand should the need arise – at no extra cost to you too.

Deal with a professional

The team at One Agency Orange are the best at what they do. We know real estate and believe in acting with honesty and transparency. Contact Ash Brown a call or come and meet the team in person at our office in Summer Street. We’re Orange’s friendliest and most energetic agency.

02 6362 9560 | Suite 7/230 Summer Street Orange NSW 2800