Should I Have the Contract Reviewed Before Making an Offer in NSW?

No, you don't have to have the contract reviewed before you make an offer on a property in NSW. An offer is generally not legally binding until contracts are exchanged, so you can make an offer, negotiate the price and, if your offer is accepted, have the contract reviewed before you sign or exchange.

You should always have the contract reviewed by your conveyancer before you sign a contract or bid at an auction. There can still be value in an earlier review, particularly if you want to know whether anything in the contract affects how much you are prepared to offer.

Why Review the Contract Before Making an Offer?

A contract review can uncover information about the property that isn't obvious from the listing or an inspection, and sometimes that information can affect what you think the property is worth.

For example, the contract might reveal an easement affecting the land, restrictions on the use or development of the property, unusual contract conditions or issues that require further investigation.

For a strata property, there may also be information about levies, proposed expenditure or other matters affecting the scheme.

None of these things necessarily means you shouldn't buy the property. But they may determine how much you are prepared to pay for it.

If you have the contract reviewed before making your offer, you can take those issues into account when deciding on your price.

Can I Make an Offer First?

Yes, and it is common to do so. If you don't want to delay making an offer, you can negotiate with the agent first and send the contract to your conveyancer once your offer has been accepted.

An accepted offer does not generally bind you to proceed with the purchase. Until contracts are exchanged, you can reconsider your position if the contract review or your other due diligence uncovers something you aren't comfortable with.

The seller is generally not bound at this stage either, which means they may continue negotiating with other buyers until contracts are exchanged.

What Happens Once My Offer Is Accepted?

Once the price has been agreed, your conveyancer can review the contract, explain any issues, request amendments and raise further enquiries where necessary.

This is the point where you should make sure you are comfortable with the contract and have completed your other due diligence before signing or exchanging.

Don't let pressure to exchange quickly prevent you from obtaining advice first. Once contracts are exchanged, your options can be significantly more limited.

What If I'm Buying at Auction?

Auctions are different. If you are the successful bidder at auction, contracts are signed and exchanged immediately, and there is no cooling-off period.

For that reason, you should have the contract reviewed and complete your due diligence before you bid at auction.

Offer First or Review First?

If you want to move quickly, you can make your offer first and arrange the contract review once it has been accepted.

If you want to know whether there is anything in the contract that could affect the price you are prepared to pay, have it reviewed before making your offer.

The important distinction is this: the contract review can happen before or after you make an offer, but it should always happen before you sign a contract.

Paul Denny Conveyancing can review your contract before you make an offer or as soon as your offer is accepted, so you know exactly what you are agreeing to before you sign. Send the contract through to our team and we will talk you through anything that needs your attention.

Frequently Asked Questions

Can I get a copy of the contract before making an offer?

Yes, in most cases. A residential property in NSW cannot be put on the market until a contract of sale has been prepared, so you can ask the agent for a copy and send it to your conveyancer before you make an offer.

What is gazumping?

Gazumping is when a seller accepts your offer but then sells the property to someone else. It can happen in NSW because a sale is not binding on either party until contracts are exchanged, which is why it pays to arrange your contract review before you make an offer so you can exchange quickly once the seller accepts.

How long is the cooling-off period for a private sale in NSW?

For most residential property bought by private sale, the cooling-off period is five business days after exchange, or 10 business days for off-the-plan purchases. It does not apply if you waive it with a section 66W certificate at exchange. If you withdraw during the cooling-off period, you pay the seller 0.25% of the purchase price.

Is there a cooling-off period if a property is passed in at auction?

Not if you exchange contracts on the same day as the auction. NSW law removes the cooling-off period for properties bought at auction and for contracts exchanged on the same day a property is passed in, so have the contract reviewed before auction day. If you exchange on a later day, the standard cooling-off period applies unless you waive it with a section 66W certificate.

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