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Is it normal to sign a contract of sale when making an offer?
186 Plays1 month ago
Thinking about buying a home in Queensland? Making an offer can feel overwhelming, but this episode breaks it down step by step, from informal email offers to legally binding contracts of sale. Learn the key differences, what to include, and how to avoid common pitfalls—so when the right property comes along, you're ready to act with confidence!
Stop guessing about your buying power! Get a FREE personalised home buying assessment with Hunter Galloway. Call 1300 088 065 or visit huntergalloway.com.au
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Transcript
Introduction to Making an Offer in Queensland
00:00:00
Speaker
Thinking about buying house in Queensland, making an offer can feel really daunting. But don't worry, I'm going to show you how to do it step by step, including how to fill out an offer form in Queensland. Now, this is Queensland specific. so if you're buying in New South Wales, Victoria, anywhere else in Australia, it's a little bit of a different process.
Methods of Making an Offer
00:00:17
Speaker
In Queensland, there are two common ways to make an offer on a property. The first way is sending an email to the agent or filling out an offer form. The second way is filling out a completed contract of sale with your offer, all the terms and conditions, signing it with your final price on there.
00:00:32
Speaker
I'll explain how both methods work and show you how to fill out the paperwork and answer some common questions. So let's dive right in. Welcome to the Buying Your First Home podcast, your personal guide through the Australian housing market. Here we tackle the big questions and the small details that come up when buying your first home. From financial prep to finding the right neighbourhood, we're here to ensure that you've got all the knowledge at your fingertips. So let's take the first step towards unlocking the door to your new home.
Informal Email Offer Method
00:01:04
Speaker
Listen, it can be completely frustrating. You might find the right home on a Saturday. The agent sticks a contract to sell into your nose and says, right, sign this if you want to go ahead. You might freak out and I see this happen all the time. So instead of that happening to you, I'm explain how all this works.
00:01:18
Speaker
Number one, sending email or completing and making it offer form. Now, first of all, this is an informal written offer. Basically, you're writing an email to the agent, lining up the details or filling out what you'd like to make an offer on this property.
00:01:31
Speaker
Generally, it's going to include the price you're offering, any conditions like subject to building pest, finance, etc. The nice thing about this method is it's pretty straightforward and a lot less formal. You're not signing anything. you can change your mind and walk away because you haven't signed any contracts and you haven't really bound yourself to anything.
00:01:46
Speaker
The reason for this is the email shows your intent, but it's not legally binding until you put it on a contractor sale signed by both parties. It's pretty much a proposal to the seller to consider. The things you want to include, your offer price, the deposit amount, your desired settlement date, and any other conditions, you know, if you want them to do it subject to strata or body corporate checks, or you want them to include extra bits and pieces in the house.
00:02:07
Speaker
Now, here's the thing to keep in mind. Even if the seller verbally accepts your offer, it's not confirmed until it's on a contract to sale. So in Queensland, it's pretty common once the seller has accepted your offer for them to move it straight to a contract to sale if you both decide and get
Formal Contract Submission Process
00:02:20
Speaker
things moving.
00:02:20
Speaker
Like i mentioned before, the second way of making an offer is going straight to that contract to sale and submitting a formal contract to sale with your offer price. Now this is where it gets a little bit more scary because this is a formal written offer. You're going to have to fill out a standard contract to sale. It's often referred to as an REIQ contract in Queensland with your offer details and sign it.
00:02:38
Speaker
What you're doing here is putting all your terms in writing upfront on the contract and it's live. You've signed it. And this is why a lot of agents are going straight to the second method. Once the contract's signed, it's legally bound.
00:02:50
Speaker
So it means it speeds up the process instead of having heard the written offer back and forth, back and forth, it goes to the contract to sale. If the agent wants to go the second method, they're getting to go straight to the contract to sale. Boom, the seller signs, the contract's live, and they're moving towards settlement.
00:03:02
Speaker
And for a lot of first-time buyers, unless you're a lawyer, I genuinely recommend you get a solicitor or conveyancer to check the contract before you sign anything. This can work against you on the weekends if you're making offers. So potentially try and sit down with a conveyancer up front if you're looking at places, get them to send through a blank contract to sale, chat to them about any terms and conditions you might want to put on there because you don't want to miss out if they're doing a bit of a best before offers before five o'clock
Preparing Contract Details with a Solicitor
00:03:25
Speaker
on a Saturday.
00:03:25
Speaker
All right, so now we've covered that, let's go through a step-by-step guide on filling out an offer form in Queensland. Now, it might sound scary. it feels like you're signing away your life, but this is part of the process and being aware of what happens is really going help you through. First up, if you're interested in the property, you can request a blank copy of the contract of sale even before your inspections.
00:03:43
Speaker
The agent will send you that even before the inspections to check it out. Nine times out of 10, like I said, it's on the REIQ contract. So it's a pretty standard document. Sometimes some agents will use another template and this is where you want to get a solicitor to check it to make sure there's no nasties hidden in there.
00:03:57
Speaker
The benefit of doing this is you can get your solicitor conveyance to check it out before you go making offers on a Saturday on the weekend just to make sure it's all good and even help you understand if you have to include extra special conditions. Because like I said, once you've signed that contract, it's too late. You can't add extra conditions after the fact.
00:04:11
Speaker
Number two, buyer's
Filling Out Buyer Details Accurately
00:04:12
Speaker
details. This is where you want to fill out your full name. You need to include all your middle names. If you've recently been married, make sure you're using your right last name. Because at the end of the day, the name that goes in this contractor sale is the name of the person that's going to buy the property, is the name of the person that's going to be on the title of the property. So it needs to match all your loan document, all your ID documents, all that sort of stuff. If you buy an investment property and you're thinking about buying it in trust, you need to know the details upfront because you need to have put that trust details on the contract to sell.
00:04:37
Speaker
Number three, check the seller and property details. The agent would have already pre-filled the seller's details, their name, and specifically the property address. So double check, this is correct. I've seen sometimes where they've misspelled the address. it doesn't happen often, but it does happen.
Stating Offer Price and Deposit Details
00:04:50
Speaker
So just double check that because again, if there's any mistakes, you're to rip up the contract and start again. Number four, offer price. This is the big one. This is on page three of the contract. It shows what you're offering. You'll have the purchase price. So make sure it's clear what you're offering there. And in the current market, generally, there's not a lot of wiggle room with negotiating back and forth. So you probably want to be close to your best and final offer depending on the market conditions.
00:05:10
Speaker
Just below that on the Queensland contract on page three is the deposit amount. Usually it's split in two parts. An initial deposit that's paid when both parties sign the contract. And then the balanced deposit that's paid once the conditions are met and the contract becomes unconditional. So If you've got 14 days finance, for example, you'll pay the initial deposit today and then the balance deposit in 14 days once you've ticked that finance box.
00:05:31
Speaker
The total deposit is generally negotiable. Most agents are looking for 5% to 10% of this deposit amount. So if you're buying place for $500,000, you might do an initial deposit of $1,000 and then a balance deposit of, say, $24,000.
00:05:44
Speaker
So the total you've paid on the contract deposit is $25,000. Now, some people get confused with this because they say, well, how does it work if I'm only doing a 5% deposit, my total deposit is $25,000. How does that work with the bank?
00:05:58
Speaker
What happens is you'll get a receipt for the deposit. So the agent will say, hey, Jaden's already put $25,000 in my trust account when it goes to get to settlement. The bank says, well,
Deposit Process and Bank Alignment
00:06:09
Speaker
Jaden had to pay a total of $26,000.
00:06:11
Speaker
total bank deposit. He's paid $25,000. So on the day of settlement, you only pay the difference an extra $1,000. If you're not sure, the contract also says the deposit holder account on that page three. You can double check with solicitor if you're not sure about which account and BSB to send it through or even the timing. The solicitor will usually say like, oh, your deposit's due Monday, your initial deposit, and your balance deposit's due in two weeks on Tuesday something like that.
00:06:34
Speaker
The next one is your finance
Finance Clause and Loan Approval
00:06:36
Speaker
clause. This is for your loan approval. So if you need a home loan and you want to be subject to finance clause, this is where you can specify 14 days from the contract date potentially your finance approval or seven days if you want to be really competitive.
00:06:48
Speaker
You can also choose to put a specific date on there. So if you want to put the 1st of March or something like that, you can do it if you want to shorten those terms. And if you bought at auction, the finance date will just be completely blank, meaning you're unconditional. There's no finance clause at all in the contract.
00:07:00
Speaker
Next one is building in pest
Building and Pest Clause Importance
00:07:01
Speaker
clause. A lot of people buy a property subject to a building in pest clause to make sure there's no major structural or pest issues with the property. Again, you can sort of tick this box. You can put in a specific date or you can put ah literally right in there, you know, 14 days from contract date.
00:07:15
Speaker
Settlement date, it's on page six. Again, you can put a specific date here if you want to settle on the 1st of April or 30th June, whatever it is. Or you can put, you 30 days from contract date. It's pretty common. This is the day you move in. So again, this is all up to negotiation.
00:07:30
Speaker
Keep in mind, if you're buying a property under the home guarantee scheme, you need to be able to move into the house
Tenancy Agreements and Legal Obligations
00:07:36
Speaker
within six months. So another section of the contract that you might have noticed on there is on page four, and says residential tenancy agreement. So it'll say if there's an existing tenant in there. When you buy the property, you're taking over that tenancy. So if the end date isn't for two years, then that tenant, you can't just kick them out like they're ah allowed to stay there you for their tenancy.
00:07:56
Speaker
um So keep that in mind because it it can affect some of your grants and and eligibility for your stamp duty concessions.
Contract Inclusions and Exclusions
00:08:01
Speaker
Inclusions slash exclusions. The contract might also have a section under the special conditions saying you know the listed inclusions.
00:08:08
Speaker
So they might say, We're going to, exclusions, the water tank at the back, we want to take that away. We're not leaving the dishwasher. They should leave that. But in other states, New South Wales or Victoria, it's it's common. They'll literally list out dishwasher, dryer, all the different things that they want left included in there. In Queensland, it's generally assumed that the stuff that's bolted down will stay with the property. But if you're not sure, it doesn't hurt to err on the side of caution.
Special Conditions Consultation with Solicitor
00:08:33
Speaker
You can put those things in there, but but it's not that common. Like i mentioned before, the other important thing with special conditions, if you want to do a subject to satisfactory body corporate checks, you really want to chat to your solicitor before you put that in there. Because if you're a layman like me, I don't know the legalese or proper words to put in there.
00:08:48
Speaker
So have a chat to your solicitor before you sign this thing. Because like say, once it's signed, it's live and you're locked in. Buy solicitor details. This is on page two. In this section, you'll fill out your solicitor details. You'll generally want this before the contract's signed. You can leave it blank and fill it in after, but it's still best practice to have it done because at least once it's signed, it goes straight to your solicitor and they get started on your
Role of Conveyancer Before Offers
00:09:08
Speaker
checks.
00:09:08
Speaker
So it's generally best to have your conveyancer chosen before you start making offers. You don't need to really talk to them until you've found a contract because there's not much for them to do until they've got a document to check. So keep that in mind.
00:09:19
Speaker
It's also worth reading the terms and conditions on the back, at least understanding what the scope is for the finance clause, for example, the billing pass to make sure you're aware of all the stuff
Signing the Contract Electronically
00:09:28
Speaker
that you're signing. And then lastly, you want to sign the contract to sale. So if you're happy with everything, you sign it.
00:09:33
Speaker
A lot of times now it's just a docusign. So it's just beep, beep, beep, pretty easy. Back in the day, you'd have to physically print it. you know It's like a 16 page document. You'd have to sign every page. It's a bit painful. But yeah, these days it's it's usually docusign so it can feel pretty quick.
00:09:47
Speaker
And once it's signed, it'll get submitted to the agent for them to review. You can send a follow-up email. ah If you've got scan and print it, yeah, scan it, send it to the agent and see what happens from there. These are the main steps when you're actually filling out a contractor sale. Hopefully that's helpful. But I guess the other way is filling out and making an offer template, which is the more informal way.
00:10:05
Speaker
Like I said earlier, it's a slower way. So that's why a lot of agents are starting to avoid this. But it can be helpful. If you want to informally test the waters and see where you're But keep in mind, the agent might not take you as seriously as someone that's just going straight to contract. Pretty much, you're going to put your offer price. You're put your deposit. You're gonna put your conditions, including subject to finance, subject to building and pest, your settlement date, inclusions, your solicitor, and your full name of the people that's going on the contract.
00:10:30
Speaker
So you can submit that to the seller and say like, hey, here's my offer. What do you reckon? But some of them might just bullet you back a contract to sale, fill it out for you and it's going to the next step.
Post-Offer Submission Process
00:10:39
Speaker
right. So it's pretty exciting. You've made your offer. You've either filled out the contract to sale or sent them an email. What happens after you've submitted an offer to a real estate agent?
00:10:46
Speaker
So in Queensland, once you've signed your contract of sale or you've submitted an offer to the agent, the agent will usually step in and start communicating between you and the seller. The first step for them is the agent will present your offer. The agents are legally obligated to present all written offers to the seller.
00:11:01
Speaker
This means whether you've offered low, high or with conditions, they have to let the seller know because the end of the day, it's their decision if they want to take your offer or not. If there's a multiple offer scenario in Queensland, the agent has to legally inform you that there's multiple offers on the table and they'll offer ask you to submit your best and final offer by a certain deadline. It can feel like a bit of a sealed bid sort of situation. It can feel a bit unfair, but it can happen in the current market. So be prepared for it. And then from there, it's up to the seller to come back to you. They can either accept, the agent will call you and say, congrats, the place is yours for this much.
00:11:32
Speaker
Or I've had cases where the agent doesn't even call you back. If your age is off, they just go to the person that accepted it and move forward. So if you don't hear back from the agent within a day or so, it's always worth giving you a bit of a follow Hey, how did I go What was the feedback on my offer? Can I have a counter offer? Just to know where it's at.
Handling Counter Offers
00:11:47
Speaker
But like i said, in a lot of cases in the current market, the agent will just take the top offer and run with that and not even let people know where they ended up. The other thing that can happen is a seller can come back with a counter offer. ah The agent you might call you and say, hey, they really liked your conditions. The 14-day finance was great.
00:12:00
Speaker
The 30-day settlement was amazing. The price wasn't what they were looking for. You'd need to come up to for them to consider it. And it gives you another chance. But don't expect that by default. Because like I said at the moment, in a lot of cases, multiple people making offers on places. You only really get one swing of that axe to make your offer friend and make it land.
00:12:16
Speaker
If your offer is accepted, congrats. Usually what will happen is the seller will then countersign the contract to sale. You'll get a copy of that. It's called the fully executed contract to sale. And then you send it to your broker to get the finance process going.
00:12:28
Speaker
You also send it to your solicitor. They'll start all their checks and then they'll tell you, hey, Jaden, it's time to do your initial deposit. going to transfer it in 24 hours to the agent's trust account, which like said, is on the contract to sale.
00:12:39
Speaker
If you're not sure, just give your solicitor a call. They can
Cooling-off Period in Queensland Contracts
00:12:41
Speaker
walk you through that. There is sometimes a cooling off period in Queensland after the contract is signed by both parties. There's a five day cooling off period unless you've waived it. So it means you can pretty much change your mind and terminate the contract for any reason within the five days.
00:12:53
Speaker
But if you do cancel during this cooling off, there's a 0.25% of the purchase price penalty. that's paid. So for example, on a $500,000 purchase, 0.25% $1,250. The rest the deposits can refunded, but they can choose to keep that $1,250, 0.25% as penalty for cancelling just because you changed your mind in the cooling off period.
00:13:09
Speaker
two five percent as a bit of a penalty for canceling because you change your mind in the cooling off period Also interestingly, sellers cannot back out during this period. Only buyers have a right to cancel the contract during that.
00:13:20
Speaker
Once they've signed, they're pretty much on the hook. That's it. It's a done deal. Once the contract's signed, you need to work through your conditions, your finance condition, for example, your broker will sort that out. If you've got building past, need to call up and get someone out there within that 14 And also the interesting thing in Queensland is insurance. If you're buying a house, we have to arrange your own insurance.
00:13:37
Speaker
You're potentially liable for the insurance if it's a standard contract from 5pm the next business day of signing the contract. So if you sign the contract today, the 14th, from the 15th, 5pm, you're liable for the insurance on the house. you need to call up and get home contents insurance.
00:13:52
Speaker
If it's a strata or body corporate, it's covered under that. So
Final Steps to Unconditional Contract
00:13:55
Speaker
it's not a big issue. Then say you've Fast forward 14 days, you've got your bank finance approved, your building and pest is all good, you're happy to go ahead. That's when you go unconditional. use Your solicitor will generally contact you, they'll email you because they love having stuff in writing. Asking if you've satisfied the finance and building and pest clause, you say, yep, I'm happy to move forward to unconditional.
00:14:12
Speaker
They'll tell the seller, hey, Jaden's unconditional in his contract, we're moving forward. That's when you transfer your balance deposit and you're locked and loaded going towards settlement.
Queensland's Buyer-Friendly Nature
00:14:20
Speaker
Making offer in Queensland may seem confronting. It's actually probably one of the easier ways. Like in New South Wales, you potentially have to go unconditional when you sign a contract. It's not that common to have a finance and building pest clause. So Queensland is definitely a bit more buy-friendly.
00:14:32
Speaker
So although it seems a bit confronting having to sign a contract to sale, it's worth getting used to and getting comfortable with that process because when the right place comes up, you're going have to jump on it and not miss out.
Hunter Galloway's Home Buyer Services
00:14:41
Speaker
at Hunter Galloway with a home for home buyers across Australia.
00:14:44
Speaker
If you want help with getting your fines approved quickly and stress-free, we're here. We help home buyers all across Australia, but we're based in Brisbane. So we have a lot of expertise dealing in Queensland with home purchases with quick deadlines and having to move stuff quickly.
00:14:58
Speaker
If you want to get a free assessment or just have a chat about your future plans, hit us up at huntergalloway.com.au. We'd love to help you out. And until next time, thanks for watching.