There has been a surge in contract mistakes, omissions, and unclear details that risk causing buyers extreme financial pain if they go unnoticed, according to findings from BuySecure.
Founder Ian Perkins said that mistakes like a misspelled name, missing disclosure, or a vague special condition can cost buyers thousands, making it crucial to never sign a contract without fully understanding it.
You’re out of free articles for this month
“If you wouldn’t buy a car without checking under the bonnet, then don’t buy a home without checking the contract,” Perkins said.
“We’ve seen contracts where the smallest oversight, such as a missing certificate, an unclear settlement clause, or a GST mistake, can derail finance or delay settlement.”
According to the findings, the top red flag to look out for was incorrect identification of the parties or property.
This can include errors in names, title references, lot and plan numbers, or missing easements, which can potentially delay settlement, complicate financing, or invalidate the contract.
The second red flag was ambiguity regarding deposit timing, release conditions, or access to funds, similarly exposing buyers to financial risk.
Recently, a Queensland buyer fell into the deposit timing trap, losing his 100k deposit as he transferred the deposit two days late in an “avoidable” mistake.
According to BuySecure, cooling-off rights, which can vary widely across Australia, should also be closely examined, as they can be shortened, waived or excluded entirely.
“Buyers often assume they can ‘change their mind’ when they legally cannot,” it said.
Insufficient or inaccurate seller disclosure has been identified as another contract trap for buyers to watch out for.
“Disclosure obligations differ by jurisdiction. Missing or incorrect certificates, reports or statements can mask issues that later become the buyer’s problem,” BuySecure said.
Buyers have also been told to watch out for missing contract conditions, keeping in mind that building and pest, or due diligence clauses, were not standard everywhere.
Loading form…
Additionally, they should be wary of unclear settlement dates and adjustments, as poorly drafted adjustment clauses can shift unexpected costs for rates, water, strata or land tax onto the buyer.
Further, buyers signing contracts have been advised to watch out for insurance obligations, which can vary by jurisdiction.
“In some states, it passes at contract exchange, requiring buyers to arrange immediate building insurance to avoid exposure if damage occurs before settlement,” BuySecure said.
Special conditions that are risky or one-sided can also be problematic if they go unnoticed, as they can override standard terms, remove warranties, restrict due diligence or shift all risk to the buyer.
GST is also a factor that can materially alter the final cost of the property, with buyers urged to check whether it applies and whether it was already included in the price.
“Errors here, including whether GST must be withheld, can lead to unexpected liabilities and outcomes,” BuySecure said.
Finally, another contract detail is possession and tenancy issues, with buyers told to check whether a contract clearly states whether a property is sold vacant or with tenants.
“Overlooking lease terms, expiry dates or bond details can delay settlement or prevent intended use,” BuySecure concluded.