When you are selling or buying real estate
August 17, 2011
If you are buying or selling a property, the Contract of Sale is the most important part of the transaction. In most cases, the real estate agents prepare the Contract of Sale, using a standard form with the “Real Estate Institute of Victoria” logo on the right hand side and have the seller and purchaser sign it. It contains ‘Form 1 – Particulars of Sale’ and recently, we discovered a client had only been given part of the Contract of Sale to sign, omitting the section that contains all the important rights and obligations, including when a person has a right to terminate the contract and what happens if there is a breach of contract. There are two parts to the Contract of Sale, Form 1 and Form 2. Form 1 is titled ‘Particulars of Sale’ and contains the names of the purchaser/vendor, the price, date of settlement and deposit. Form 2 is titled ‘General Conditions’.
A purchaser and a seller need to sign the full contract containing Form 1 and Form 2, otherwise the parties are not made aware of their obligations and rights, including the following:
- payment of the balance of the money at settlement;
- a timeline for the purchaser to prepare the transfer of land document and sending to the vendor for registration at the Titles Office;
- timing of release of deposit to the real estate agent;
- whether the Contract is subject to a loan; and
- inspection of the property by the purchaser 7 days prior to settlement.
The Real Estate Institute of Victoria (REIV) advised that any purchaser or vendor should contact the manager of the real estate agency if Form 2 of the Contract of Sale has not been given to either party to read and sign by an agent, as it is part of their training to give the whole contract to the parties involved.
Peter Mericka, Director of Lawyers Real Estate Pty Ltd notes that real estate agents have adopted the practice of using only ‘Form 1’ part of the Contract of Sale (something similar to the old use of ‘Contract Notes’) and not always including ‘Form 2’. In one instance, a real estate agent dealing with Peter’s firm sent only the Form 1 portion of the Contract of Sale indicating that this was the entire Contract of Sale document, without any mention of Form 2. We are also aware that some real estate agents may be only giving the Form 2 to the purchaser and not the vendor.
Irrespective of whether you are a vendor or purchaser, ask the real estate agent for the whole Contract of Sale – Form 1 and Form 2. Then you can be sure you are aware of all your rights and obligations under the Contract of Sale.« Back to news