Understanding The Qld Contract Exchange Process

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Queensland real estate is on the radar of home owners, first home buyers and investors alike, due to its relative affordability compared to Sydney and Melbourne. 

In fact, interstate migration is on the rise in Queensland, as more southerners consider making the move to the Sunshine State in search of more property bang for their buck.

Historically, this migration happens every time the price differential between the three major capital cities makes Brisbane an attractive property price proposition.

But buying Queensland real estate in a legal sense is different than in Victoria, as well as other States and Territories – and that’s primarily because there is no Section 32 in Queensland.

DOES QUEENSLAND HAVE ANYTHING LIKE A SECTION 32 FOR CONTRACT EXCHANGES?

Instead of a section 32 document, Queensland real estate is bought and sold via a Contract of Sale for House and Residential Land, which has been developed by the Real Estate Institute of Queensland (REIQ) and is endorsed by the Queensland Law Society.

The REIQ Contract for House and Residential Land, now in its 14th edition, is a succinct document that is used by both the seller and the buyer for a property sales transaction.

Let’s find out more about Queensland real estate and how you buy and sell it, shall we?

WHAT WILL I FIND IN THE REIQ CONTRACT TEMPLATE?

When buying Queensland real estate, contrary to Victoria and New South Wales, there is no contract exchange as such. Rather, both the seller and buyer sign the contract once negotiations are complete.

The REIQ sales contract – which is different for houses and community title schemes – is initially prepared by the seller’s representative, such as their real estate agent or their conveyancer, with the prospective buyer’s details added in once negotiations have begun.

The buyer will then take a copy of the signed sales contract to their legal representative to review during the five-day cooling off and/or finance period.

When buying Queensland real estate, time is of the essence, which means that a number of conditions must be met during the property settlement period – including finance, and building and pest inspection reports.

Within the REIQ contract template you will find: 

  • The first page includes the seller and agent details, which must be 100 per cent correct to prevent potential problems during the settlement period. For example, if the property is jointly owned then both seller’s names must be included.
  • On the second page is where the property’s details, as per its official property title, are listed as well as any excluded fixtures. It is also where the buyer’s details are listed including their legal representative. 
  • The third page is where the price offered by the buyer is included, which can be changed during further negotiations when signed off by both parties, as well as any encumbrances or tenancies. It is also where the finance or building and pest inspection periods should be listed, such as 14 days for finance to become unconditional. In Queensland, once the “finance period” is passed and the sale becomes unconditional it is usually difficult to walk away legally from the transaction.
  • On the fourth page, you will find disclosures regarding pool and electrical safety as well as smoke alarms and any neighbourhood disputes involving dividing fences or trees.
  • On the fifth page is where any special conditions should be written, such as early access prior to property settlement to begin renovations or to prepare for tenants. In Queensland, these special conditions cannot be prepared by an agent. They must either be written by a legal representative or by the buyer or seller. However, it is advisable that a legal practitioner prepares any special conditions for the avoidance of doubt.

TRANSFER OF SALE, STATE BY STATE

When buying or selling Queensland real estate, the legal transfer of the property from one party to another is called conveyancing and is undertaken by a legal practitioner.

When buying a property in Queensland – and once negotiations have been completed and the contract has been signed by both the seller and buyer – copies of the contract are given to each party’s legal representatives.

If you’re the buyer, your conveyancer will complete a number of searches on your behalf to double-check that all material facts have been disclosed about the property.

Each State and Territory across Australia has its own real estate and conveyance laws so it’s important that you have an understanding of what these are if you’re considering buying interstate.

I’M BUYING A HOUSE INTERSTATE – WHAT ELSE DO I NEED TO KNOW?

Borderless investing is becoming more common, as investors consider other locations to ensure they are buying the very best properties to suit their investment strategies. 

Buying interstate, however, is not without its complexities, such as different real estate laws.

The legal mechanisms of buying and selling real estate are more complex than they might appear.

Another difference if considering buying Queensland real estate is that auctions are not as popular as they are in Melbourne and Sydney, plus price guides are generally not advertised when a property is being sold at auction.

Buying property interstate might seem like a headache, but it doesn’t have to be if you have the right advice.

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Published in Michael Yardney's Property Update by Andrew Mirams; 15th December 2017