MAY 07, 2020
Understanding your real estate contract
The most common real estate contacts are ones of sale for a property. A contract of sale is a legally binding agreement made between you and the owner of the property that you intend on purchasing. Unsurprisingly, contracts can be complex in nature and difficult to understand, thus it is important to seek advice from contract lawyers Melbourne to ensure that you have a sound understanding of the contract. Contract lawyers are equipped with legal expertise – they can help you grasp your legal requirements and obligations in order to complete the transaction successfully.
A contract is a legally binding agreement entered into between two consenting parties. In order for the contract to be enforceable, the agreement must contain sufficient evidence of the below elements.
If an agreement does not fulfil the above elements, it is not a valid contract and therefore has no legal standing.
Similar to standardised contracts of sale, a real estate contract contains the below essential elements:
At the very top of the agreement, there will be an assigned area for the property’s address alongside the current owner’s names. It is important to double-check all the information included to avoid signing an agreement for the wrong home.
Chattels include things such as fixtures and fittings. You will find a designated area for the chattels that are included in the sale of your home. If the current owner has stated that certain chattels will be included in the sale of the property, it is important to check the list before signing to ensure that they are explicitly stated.
Any and all conditions such as finance or inspections will need to be identified in the settlement conditions area. Each condition needs to be numbered and initialled by both contracting parties
There will be a designated section in the agreement detailing the deposit amount and when this is due in order to secure the home. The remaining balance will also be specified. Ensure that you thoroughly check this section to ensure that the figures are correct. Additionally, identify a settlement date for the contract.
There may be other aspects of the contract that you may be responsible for such as building insurance, once the exchange of the contracts has been completed. It is important to discuss this with your lawyer prior to signing.
At some point in your life, you will be faced with a real estate contract whether as the purchaser or as the seller. Hence why it is important to have a basic understanding of how real estate contracts operate and what their essential elements are. Before proceeding in the signing of a sale contract, it is crucial for a lawyer to oversee the terms and conditions that are stipulated so that you are aware of your legal obligations. If you are unsatisfied with a specific term, your lawyer may even be able to negotiate the term to your satisfaction.
Join us to keep up to date with property news, inspiration and advice.
Four things you’ll want to know before buying your first home
It is possible to have fun and be practical with your first home buying jou...
How to make an offer on a house
So you’ve stepped through the door at an open home and finally discovered t...
Should you buy your new mattress online without seeing it in person?
With competition booming in the mattress industry, there has been a recent ...
Look above for inspiration
In its most recent economic outlook, the Reserve Bank of Australia noted th...