Understanding a contract of sale

Why it's important to review your contract before you sign for your new home.

Signing a contract of sale is one of the most important stages when it comes to purchasing your home. Reviewing your contract before your sign it will help you understand what it contains and what you’re committing to. Here’s a guide to get you started.

What is a contract of sale?

A contract of sale is a crucial requirement when engaging in property purchases. Not only is it legal protection for both buyers and sellers, but it ensures transparency in the terms and conditions including financing, inspections and special requests.  

What are the key elements in a contract of sale?

  • Name of Vendor and Purchaser – this identifies the seller (vendor) and the buyer (purchaser)
  • Property Address – make sure the contract of sale accurately states the address of the property being sold/purchased.
  • Purchase Amount / Contract Price – the agreed-upon purchase price for the property.
  • Deposit Amount – amount of the deposit required and the terms associated with it.
  • Property Settlement Date - what date will the property change ownership?
  • Solicitor Details – contact information for solicitors representing both the buyer and the seller.
  • Financing Arrangements – an explanation of how money is to exchange between parties, and what happens if there’s a breach of contract.
  • Possession Status – this determines whether the property will be available for vacant possession, or if it is subject to an existing lease or tenancy.
  • Special Conditions – this will cover any requests that have been agreed upon by both parties. For eg: ‘subject to loan approval’, or ‘subject to tenancy’ clauses.
  • Building and pest inspections – this could help you cover any specific concerns about the property’s condition.
  • Cooling off date – which specific date can you exercise your cooling-off rights, if applicable.

These elements help form the basis of a Contract of Sale and familiarising yourself with a contract of sale can ensure a smooth property purchase process. Appointing a solicitor or conveyancer, who can review the details for you, can make it easier to understand your contract and next steps.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000.

^ Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. This discount is applied to each loan that you have with Unloan. If you have multiple loans (e.g. one investor and one live-in loan), they will each have a discount calculated based on when you settled each loan. Unloan may withdraw this discount at any time.

There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.

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Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions will be set out in our loan offer, if an offer is made.

^Rates shown are inclusive of a 0.01% p.a. discount off our reference rate. On each anniversary of your loan’s settlement date, you will receive an additional discount of 0.01% per annum, up to a maximum discount of 0.30% per annum. For purchase loans with a Loan to Value Ratio (LVR) between 80.01% - 90% LVR, a lenders mortgage insurance (LMI) premium and higher interest rate apply. In some cases depending on the property’s location or type, LMI may also be required for LVR between 70.01% and 80%.

*Comparison rate is calculated on a $150,000 secured loan over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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