Contract of sale of real estate

 Contract of sale of real estate

The contract of sale of real estate, between the vendor and purchaser, is the primary document setting out the obligations of the parties.

It is a document that establishes the rights and obligations of the parties to be performed over a period of time, culminating with payment by the purchaser of the purchase price and transfer by the vendor of the title to the property. This exercise is known as settlement and traditionally occurs 60 to 90 days after the signing of the contract.

The fundamental requirements for the contract of sale of real estate is that it must be in writing and signed by all the parties involved. Section 126 of the Instrument Act 1958 states that the contract of sale of real estate must be:

    “In writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement”

Apart from these basic requirements, there is no prescribed form of contract – a contract may be as simple as a single page document that sets out the fundamental terms.

Who prepares the contract of sale of real estate?

Traditionally, the vendor or their lawyer prepares the contract of sale of real estate, but there is no reason why it cannot be prepared by the purchaser or their lawyer.

The contract of sale is tailored to suit the parties and circumstances of the sale. The document itself usually contains various conditions that sets out the conditions for the purchase, or sale.

Most lawyers and licensed property conveyancers use the standard form contract of sale of real estate in order to ensure that there is uniformity in the industry. This allows industry professionals and consumers to anticipate their rights and responsibilities.

The Law Institute of Victoria’s (LIV) standard form of the contract of sale of real estate can be purchased here. A sample copy of this document can also be viewed at the elawpublishing website.

Alternatively, contact us to assist you in preparing the contract of sale.