Updated 25 October 2026
What Property Buyers Need to Know About the Contract for Sale #1: What is a Contract for Sale?
Back to the 50 buyer questions about contracts for sale
What a contract for sale means for a buyer
A contract for sale records the terms on which a seller, called the vendor, agrees to sell property to a buyer, called the purchaser. It identifies what you are buying, the price, your obligations and the circumstances in which either party may have a right to end the transaction.
For a NSW residential purchase, obtain the contract early and have a lawyer check it before exchange or bidding at auction. The seller’s solicitor or licensed conveyancer prepares the document, but you need independent advice about whether its terms protect your plans and financial position.
Read the whole contract and its special conditions
Start with the parties’ names, property address, lot and plan details, price, deposit and completion date. Confirm whether the property will be provided with vacant possession or subject to an existing tenancy. Check the inclusions and exclusions, especially appliances, fixtures and items discussed during inspections.
Read the standard conditions together with the special conditions and attachments. Special conditions can change important rights, including adjustment payments, delays, access before settlement and remedies for breach. A familiar-looking contract is not necessarily suitable for your purchase.
Tell your lawyer who will buy the property and in what capacity. Buying personally, jointly, through a company or as trustee can have different legal, lending and tax consequences. Resolve that decision before exchange.
Understand the documents the seller must provide
NSW vendor disclosure requirements generally call for title information, the relevant plan, drainage diagrams, a council planning certificate and documents concerning applicable easements, covenants or restrictions. Additional documents may be required for strata property, swimming pools and off-the-plan sales.
A section 10.7 planning certificate provides specified planning information, including zoning and relevant constraints. It does not establish that every existing alteration is approved or that your proposed renovation can proceed. Ask for further enquiries about any intended use or building work.
Missing prescribed documents or breaches of statutory warranties may give a buyer remedies, subject to legal conditions and deadlines. They do not automatically make every contract void. Have your lawyer investigate promptly rather than assuming you can withdraw.
Arrange inspections and check strata records
Contract disclosure is not a guarantee that a building has no defects, nor a blanket obligation to identify every physical problem. Arrange appropriate building and pest inspections before committing. Check the inspector’s qualifications, the report’s scope and any inaccessible areas. A standard building report may exclude concealed defects, pest assessment and repair estimates.
For an apartment or other strata property, obtain a strata records report as well. Review levies, finances, insurance, meeting minutes, proposed works, defects and disputes. Read the by-laws and confirm the legal status of parking and storage areas. Strata records and a physical inspection answer different questions.
Negotiate finance and other protections before exchange
A finance condition or satisfactory-inspection condition is not automatically included. Ask your lawyer whether you need one and whether the seller will agree. Any condition should clearly state the requirement, deadline and consequences if it is not met.
Loan pre-approval does not guarantee final finance. Confirm the lender’s requirements, valuation and your available contribution before committing to an unconditional purchase. A loan refusal does not itself release you from the contract.
Record agreed repairs, inclusions, price changes and settlement arrangements in the final contract. An agent’s assurance that an issue will be sorted out later can leave the obligation uncertain. Ask your lawyer to confirm amendments with the seller’s representative.
Know when the agreement becomes binding
In a usual private treaty sale, exchange of contracts is the point at which the parties become bound, subject to applicable conditions and withdrawal rights. Signing your copy alone is not necessarily exchange. Your representative should confirm when exchange occurs and give you the final contract.
An expression-of-interest payment does not secure the property or oblige the seller to sell to you. Auction purchases require preparation before bidding because the successful bid ordinarily commits the buyer without a cooling-off period. Obtain contract advice, inspections and finance confirmation beforehand.
Check cooling off rights and the exact deadline
Under the NSW cooling-off provisions, residential buyers generally have five business days after exchange, ending at 5 pm on the fifth business day after the day of exchange. Off-the-plan contracts generally have ten business days.
There is no cooling-off period for an auction purchase or a contract exchanged on the same day after the property is passed in at auction. A valid section 66W certificate can also waive the protection. Have your lawyer explain any proposed waiver or shortening before you agree.
Exercising statutory cooling-off rights costs 0.25% of the purchase price: $2,500 on a $1 million purchase. Proper written notice must be served within time. Do not rely on a telephone call to the agent.
Ask your lawyer to calculate the deadline and arrange any agreed extension before it expires. Other contractual or statutory rights may operate differently from cooling off.
An off-the-plan purchase involves a property that may not yet exist in its finished form. Review the disclosure statement, draft plan, proposed finishes, completion timetable and provisions permitting changes. Ask your lawyer what happens if the development changes or is delayed. Additional statutory protections may apply, but their conditions and notice deadlines matter. Do not assume the finished property must match every image in the sales material.
Budget for duty and settlement payments
The purchase price is only part of the budget. Allow for legal fees, inspections, registration charges, lending costs and adjustments for relevant outgoings. Ask for an estimated settlement statement so you know the additional funds required.
Transfer duty is generally payable by the earlier of settlement or three months after the contract date, although concessions, exemptions and eligible off-the-plan deferrals may apply. Confirm your position and deadline early.
For contracts entered into from 1 January 2025, foreign resident capital gains withholding generally uses a 15% rate with no property value threshold. Your representative should check clearance certificates and any applicable exemption or variation, and arrange any required withholding payment to the ATO from the purchase price.
Prepare for settlement and registration
Settlement is the later completion stage, when the balance and adjustments are paid and the transfer documents are lodged. In NSW, your lawyer or licensed conveyancer generally handles this through electronic conveyancing. Confirm that funds and loan documents will be ready.
Arrange a final inspection and promptly report missing inclusions, damage or unfinished agreed work. Obtain advice before withholding funds or refusing to settle. Depending on the contract and circumstances, default may expose you to interest, loss of deposit or damages.
Ask your representative to confirm successful settlement and registration of the transfer. Exchange alone does not make you the registered owner.
In Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60, buyers of a Sydney waterfront property alleged that a brochure’s survey diagram misrepresented the boundary near a swimming pool. The High Court, by majority, dismissed their appeal against the real estate agent.
In the particular circumstances, including the brochure’s disclaimer, the agent had passed on information supplied by others without representing that the survey was accurate. This does not give agents or sellers a general exemption from liability for misleading statements.
The practical lesson is to investigate boundaries and proposed alterations through appropriate professional enquiries before committing. A marketing brochure should not be treated as confirmation that your plans can proceed.
Speak with Christine before committing to a purchase
Contact Christine and the CM Lawyers team with the complete contract, attachments, inspection reports, finance position and proposed exchange or auction date. Explain any plans to renovate, rent out or redevelop the property so the review addresses what matters to you.
Always have a lawyer check the contract and agreed amendments before you sign or bid. This guide is a starting point for understanding the process; the actual contract and your circumstances determine the advice you need.
This article provides general information about NSW property sale contracts. It is not a substitute for legal advice about your contract and circumstances.
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