Understanding the contract process in Queensland can be a maze to navigate. Property buyers purchasing real estate from interstate often are not aware that the process in Queensland is different from other states. It can feel daunting, especially for first-time buyers.
Common Questions We Are Asked:
- What is the process of making an offer on a property?
- Can a real estate agent disclose offers to other buyers?
- What is a multiple-offer situation?
- When does a contract become unconditional?
- What is the normal settlement period in Queensland?
This article summarises the steps involved in making an offer and the full contract process in Queensland, helping home buyers and investment clients understand what to expect.
Buying at auction has its own process, where a professional auction bidding service can help since purchases are unconditional on auction day. This guide focuses on the contract process in Queensland for properties sold by private treaty, which is the most common type of sale.
Step 1 – Making an Offer on a Property in Queensland
Once you’ve found the property you want, the next step is to make an offer.
Assuming you have already inspected the property and completed your due diligence, if not, I recommend checking out 9 Property Due Diligence Checks before You Buy.
Many buyers start with a phone call to the Sales Agent for a verbal offer. However, verbal offers are often unclear. We strongly recommend submitting your offer in writing using the Contract of Sale.
Some agents provide a “Letter of Offer” form, which is better than verbal but still not as effective as a full contract. A written contract allows:
- Review by a solicitor before signing
- Serious consideration by the seller
- Clear definition of terms and conditions
Common Conditions in Queensland Property Contracts
Typical contract conditions include:
- Subject to Finance
- Subject to a Building & Pest Inspection
- Subject to Body Corporate Searches
- Subject to further Due Diligence
- Subject to a Rent Back
Other conditions may apply depending on individual circumstances. All conditions are negotiable during the contract process in Queensland.
Here is a quick video explaining how to make your conditions more favourable to a seller:
What Information Needs to Be Included in Your Offer?
To complete a contract accurately, include the following:
- BUYER: The full legal name of the buyer purchasing the property. Include all middle names and double-check the spelling, as correcting errors after the contract is complete can be costly. If the buyer is a company or trust, confirm that it is registered and a legal entity on the contract date.
- BUYER’S SOLICITOR: Provide the details of the conveyancing firm handling the purchase. Do not assume you can handle this yourself, experts exist for a reason!
- PURCHASE PRICE: The amount you will offer depends on property value, market conditions, competition, and other factors. Many buyers make mistakes here, either overpaying or missing out to a higher bidder. Expert advice from a professional buyers agent can save both money and stress.
- DEPOSIT: Usually broken into two parts, both negotiable. In Queensland, the total deposit cannot exceed 10% of the purchase price. The funds are typically held in the Sales Agent’s trust account until settlement:
- Initial Deposit: Payable once the contract is accepted.
- Balance Deposit: Payable once the contract becomes unconditional.
- FINANCE: Indicate whether the contract is conditional on obtaining final finance approval, including the number of days required for approval.
- BUILDING & PEST INSPECTION: If the contract is conditional on these inspections, include the timeframe for completion.
- POOL SAFETY INSPECTION: Required if the property has a pool. Either provide a current certificate or arrange an inspection. Check your solicitor’s guidance on contract requirements.
- SPECIAL CONDITIONS: Any additional clauses you wish to include. Legal advice is recommended.
- SETTLEMENT PERIOD: The number of days from contract acceptance to settlement. This may be a specific date or a set number of days. In Queensland, 30 days is most common, but the period is negotiable.
When all these particulars are included in a signed contract, the seller can clearly see the entire offer, not just the price. Often, the conditions accompanying an offer influence the seller’s decision.
In competitive markets, multiple offers may occur. There are specific regulations around multiple-offer situations, and professional guidance can help buyers navigate these effectively.
See the video below for some hints and tips for buyers in this situation.
Presenting your offer in contract form allows the seller to sign immediately, creating a legally binding contract. Alternatively, the seller may provide a written counteroffer for your consideration.
This approach is a powerful way to negotiate, as each party clearly understands all the particulars related to the purchase.
Handling Multiple Offers and Counteroffers
Once an offer is presented, three outcomes are possible:
- Accepted by the seller → contract signed.
- Rejected by the seller → negotiations end.
- Counteroffer → negotiations continue until agreement.
Most agents use standard form contracts approved by the Real Estate Institute of Queensland (REIQ) or the Queensland Law Society.
Step 2 – Offer Accepted: Cooling Off and Conditional Contracts
Once your offer is accepted by the sellers, then the Real Estate Agent will date the contract and it then becomes legally binding.
This is the time to celebrate milestone number one!!!!
This is also the time when the initial deposit will become due and payable. You should receive instructions from the Real Estate Agent in relation to where the deposit money needs to be transferred.
What Is the Cooling-Off Period in Queensland?
- Queensland law provides a five business day cooling-off period for residential property contracts (excluding auctions).
- The period starts when the buyer receives a copy of the signed contract.
- Cancelling during this period may result in a penalty of up to 0.25% of the purchase price.
Conditional Contracts – What Happens Next?
If a contract is entered into and is conditional on finance, building & pest inspections, or any other special conditions, certain steps must be taken by the buyer immediately:
1. Follow Contract Timeframes:
The contract will specify deadlines to satisfy the conditions. These are often within 14 days, but they can be shorter or longer depending on what is negotiated between the parties.
2. Schedule Inspections:
Book a building and pest inspection, and if relevant, a pool inspection. Access for these inspections is usually coordinated with the Real Estate Agent to ensure everything is completed on time.
3. Coordinate Finance Approval:
Work with your bank or mortgage broker to complete all steps necessary to obtain final finance approval. This may include arranging a property valuation, which is also coordinated through the Real Estate Agent.
4. Communicate with Your Solicitor or Conveyancer:
Regular updates with your solicitor or conveyancer are critical during this period. They ensure you meet all contractual obligations and deadlines.
5. Satisfy Contract Conditions:
Once all conditions have been met to your satisfaction, your solicitor will notify the seller’s solicitor. At this point, the contract becomes unconditional, and the balance deposit outlined in the contract becomes payable.
When Does a Contract Become Unconditional?
A Queensland residential contract becomes unconditional when the buyer notifies their solicitor that all conditions are satisfied.
- The balance deposit becomes payable.
- Pre-settlement inspections are recommended.
- Banks coordinate with conveyancers for settlement, and necessary paperwork is submitted to government bodies.
Here is a short video explaining this process:
Step 3 – Settlement: Final Stage of the Contract Process
Settlement is the final stage of buying a property:
- Seller receives payment.
- Buyer takes legal possession.
- Settlement attended by bank representatives and solicitors.
- Keys are collected from the real estate agent.
Summary and Recommendations
There are many stages in the contract process in Queensland and this article has outlined them in detail. Purchasing a property can be complex. Of course, some contracts may be a lot more complex with special conditions and therefore legal advice is recommended in these circumstances.
Property buyers should seek the assistance of a professional Brisbane Buyers Agent or Solicitor to navigate through this process. Of course, we are here to help clients navigate this process and ensure a smooth property purchase experience.
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