Once a property is described as under contract, it means a buyer and seller have signed a contract of sale, though it is worth understanding what still needs to happen before that contract is final and unconditional.
What actually makes a contract binding
A property becomes subject to a binding contract once both the buyer and the seller have signed. Before that point, verbal agreements or an accepted offer are not the same as a signed, binding contract.
The cooling-off period
Queensland has a statutory cooling-off period of five business days that applies to residential property contracts, for buyers only. It starts when the buyer receives a copy of the contract signed by both parties, and if that happens on a weekend or public holiday, the period starts the next business day. It runs until 5pm on the fifth business day.
To use the cooling-off period, the buyer must give written, signed notice to the seller or their agent by the deadline. If a buyer terminates within this period, the seller can deduct a penalty of up to 0.25 percent of the purchase price from the deposit, refunding the balance within 14 days. A buyer can also waive or shorten the cooling-off period in writing if they choose to.
The cooling-off period does not apply to properties bought at auction, and it also does not apply to a private treaty contract signed within two business days of an unsuccessful auction where the buyer was a registered bidder at that auction.
What happens after signing
After the contract is signed, it typically remains conditional until things like finance approval or a satisfactory building and pest inspection are met, at which point it becomes unconditional. Settlement, where the balance of the price is paid and the title transfers, is the final stage.
What to verify before you act
This is a general description of the process rather than advice on a specific contract. The exact cooling-off arrangements, exceptions and any conditions in a particular contract should be confirmed directly, ideally with the help of a conveyancer or solicitor, since the consequences of missing a deadline can be significant.
Sources
- Queensland Government, Cooling-off period and Contract of sale pages, qld.gov.au
This article is general information only and is not legal advice. Contract rules can change and can depend on individual circumstances. Always confirm current requirements with a qualified conveyancer or solicitor before relying on any timeframe.
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