Things to look out for in a contract of sale

Who prepares the contract of sale?

The contract of sale is a legally binding agreement between a buyer and seller that sets out the terms and conditions of a property purchase. It’s usually prepared by the seller’s legal representative, often a conveyancer or solicitor. This ensures the document meets legal requirements and includes all the details of the property transaction.

As a buyer, it’s best to sign the contract only once you’ve had your own legal expert review it. They can check for errors, explain any complex terms and make sure the conditions protect your interests. This step is especially important if you’re considering adding special conditions or negotiating terms. If you’re unsure who to engage, a conveyancer can guide you through the process and help you understand what you are signing. Having the right advice early can prevent costly mistakes later.

What’s included in the contract of sale?

The contract of sale sets out all the key details of the property transaction. It includes:

• the agreed purchase price
• deposit amount
• settlement date
• items included or excluded from the sale, such as appliances or fixtures.

You will also find special conditions and the Section 32 statement (if buying in Victoria), which is a legal disclosure about the property. If you're buying property outside Victoria, the vendor disclosure document may have a different name, for example, Form 1 in South Australia, a seller disclosure scheme in Queensland, or key disclosure documents included in the contract of sale in New South Wales, etc. Each state has its own rules, but the purpose is the same, which is to give buyers essential information about the property.

Understanding Section 32

In Victoria, the Section 32 (or vendor’s statement) is a mandatory disclosure document (required information about a sale) that comes with the contract of sale. It includes important information such as:

• council rates
• zoning restrictions
• planning notices and
• any encumbrances (limitations) on the property.

This statement helps you understand what you’re buying beyond the physical home. If something in the Section 32 raises questions, speak to your legal adviser before signing.