Why is Contract Review Important Before Auction?
- Rayson L.
- Jul 15
- 5 min read
Updated: Jul 16
A First Home Buyer tried saving $300 by not reviewing their sales contract, and ended up paying $50,000 to fix an easement issue. Sales contract review is a critical due diligence requirement before buying any properties in Melbourne and Australia. In this article, we will cover what a sales contract is, the critical information it contains, and why that matters.
Why is a Contract of Sales Review Important?
A sales contract is a legal contract between the seller and the buyer. This legally binding document is usually about 100 pages (or more, for new builds) long and lists the important information about the property for sale and other information about the ownership. These are critical information which buyers need to know, before they buy any properties. It is thus, important to understand the Contract of Sales, so you understand the property and your obligations as listed in the contract, before you buy the property.
What is Included in a Real Estate Sales Contract in Australia?
The basic information that must be included in the sales contract varies from state to state. The minimum information from some states are more complete than others. In Victoria, the Victorian Contract of Sales is one of the more detailed contracts, and includes a Vendors Declaration section. This Vendor's Declaration is also known as the Section 32 in Victoria, or S32 for short.
A complete Victorian Contract of Sales includes the Sales Contract and the Section 32, and typically lists:
Information of the property and ownership, including:
who the legal title holders are
the vendors' details
details of all applicable mortgage
the land title and information about the land
local council rates
property water rates
body corporate (strata) details and fees, if applicable
etc
Agreements between the seller and the buyers, including:
how the sale is being done
responsibilities of both the buyer and sellers
penalties if any of the responsibilities are not fulfilled or delayed
special agreements between the seller and buyers, not specified in the main contract
etc
The sales contract is typically paid for by the seller and often contain onerous conditions worded by the seller's solicitor to protect the seller. If you are buying a property in Victoria, you should read and understand the Victorian Contract of Sales. As with any other legal documents, it is your responsibility to understand the contract before you commit to it. If you, like most people, are confused by the legal jargon, you should get the contract reviewed by a solicitor, before you commit to the purchase.
What is the Special Conditions Section of the Property Sales Contract?
The Special Condition Section of the sales contract is:
A lists of specific terms and conditions in the contract to deal with unique or exceptional circumstances of the property or situation of sale.
Used to document any special agreements between the seller and the buyer.
Used by both the seller and buyer to add, delete, or change any parts of the contract.
Who can Review the Sales Contract?
Anyone with a good command of English and legal property jargon can review. However, we would always recommend the review be done by a person familiar with the legal jargon and property law. So, that would usually mean a property lawyer / solicitor or a conveyancer. The legal knowledge and quality of the review varies between a solicitor and conveyancer. If you can afford it, experience tells us to always go for a solicitor. We will explain why later.
What will the Contract Review Tell Buyers?
A diligent solicitor acting on behalf of the buyer will highlight the key points in the contract which buyers must know, highlight clauses, terms and conditions, responsibilities which are unfair and which are too onerous (ie, pro-seller), and suggest how you can respond to them.
This is where the difference between a review by a solicitor vs conveyancer are. Reviews done by solicitors:
contains details of the owners, land title, property, etc
more complete, and because of their knowledge in property law and contract
identify "redflags", onerous / unfair clauses in more detail, and
suggest alternatives to rephrase and protect you
recommend additional special conditions to further protect your buying interests
Reviews from conveyancers tends to be more generic, because of the lesser knowledge of property laws, and are usually limited to highlighting details of the property and ownership only.
How Much Does a Contract Review Cost in Melbourne?
In Victoria, solicitors typically charge between $300-$500 for a Victorian Contract of Sale review, depending on the complexity of the contract. Contract of Sales reviews by conveyancers are typically cheaper at between $150-$300. Most solicitors and conveyancers, however, provides a couple of free contract reviews, when you engage their conveyancing services. The contract review fee is a small fee to pay, in the bigger scheme of things. You would not want to save the $500 review cost when you are committing yourself to a million dollar property.
When Should You Get the Contract Reviewed if You Are Going For Auction?
Now, because properties bought at auctions are unconditional, it is wise not to commit to a purchase without knowing what you are in for. To avoid any legal surprises, you should get the contract of sales reviewed BEFORE you attend the auction, as there are no cooling off period, and you cannot say "Oops! I made a mistake" and walk away without serious legal consequences.
Can You Change the Real Estate Sales Contract?
Yes, anyone can change the sales contract. You can change most parts of the contract, which you are uncomfortable with. Changing this, is as easy as striking out or changing the clauses which you are concerned with, or modifying clauses using the Special Conditions section of the contract. Anyone can modify the contract, however, because it is a legal contract, it is recommended that you get the changes worded appropriately by your solicitor to prevent ambiguity.
What Happens When Property Settlement Falls Through?
If a settlement stalls, falls through or agreed conditions are not fulfilled, the gap between a property solicitor and a conveyancer becomes crystal-clear. A solicitor can step in immediately, outline your legal options, negotiate extensions, or pursue damages—giving Melbourne buyers a roadmap through the crisis. A conveyancer, by contrast, has limited authority and will often recommend escalating the matter to a solicitor—adding time, stress, and extra fees.
Conclusion
As you can see now, the contract of sales is an important legal document that can determine if you should buy the property, your responsibilities, you ability to use the property in a way you wanted to, etc. It is thus, critical to have this reviewed by a respectable property solicitor.
While some conveyancers might be cheaper and provide some limited form of contract review, it is usually wiser to engage a property lawyer. As professionals, we only rely on our network of trusted property solicitors to review the contract and perform the conveyancing.
If you are attending an auction, and need help to determine the price of the property, and have due diligence completed, have a chat with us. Our buyers advocates can help prepare you for your upcoming auction and strategise how we can auction bidding strategies.
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