Contract red flags: what to watch for before you sign

The contract of sale is the document that actually binds you to the purchase. The Section 32 discloses the property; the contract is where you commit. Most contracts are written from a template, but the changes to that template, the special conditions, the timing, the inclusions, are where buyers get caught out.

For the full document explained end to end, this sits inside our complete guide to the Section 32.

Here are the red flags to check before you sign.

1. Special conditions

The standard contract has dozens of pre-printed clauses. But a vendor's solicitor can add special conditions to suit them. These can dramatically shift the contract in the seller's favour.

Common special conditions to watch for:

• Extended settlement period that locks you in but lets the vendor occupy
• Subject to vendor finding another property (rare but it happens)
• Limited right to make finance applications
• Reduced cooling-off period or removed cooling-off entirely
• Restriction on building or pest inspection conditions

A special condition isn't automatically bad, but every one needs to be read carefully.

2. The deposit

Standard deposits in Victoria are 10% of the purchase price, paid on signing or within a short period after. The contract specifies when.

Watch for:

• Deposit higher than 10%, unusual and worth questioning
• Non-refundable deposits before cooling-off ends
• Deposit released to the vendor before settlement, without a Section 27 statement (a vendor's statement of assets): your conveyancer should review this carefully before you agree

The deposit usually sits in the agent's trust account until settlement.

3. Cooling-off period

In Victoria, private treaty sales come with a three-business-day cooling-off period. You can pull out for any reason and lose 0.2% of the purchase price (or $100, whichever is greater) as a penalty.

Cooling-off does NOT apply if:

• You bought at auction
• You bought within three business days before or after an auction
• The property is over 20 hectares of farmland used for residential or industrial purposes
• The contract excludes it via special condition

If you're not buying at auction, the standard cooling-off should be there. If it's been removed by special condition, ask why.

4. Settlement timing

Standard settlement in Victoria is 60 days but can be anywhere from 30 to 120+ days. Make sure the timing works for:

• Your finance approval timeline
• Your current lease end date (if renting) or your existing sale settlement (if upgrading)
• The vendor's reasonable expectations

A settlement period that's too short can leave you scrambling for finance. Too long can mean paying additional interim accommodation costs.

5. The inclusions and exclusions

What's included in the sale? In Victoria, fixtures (things attached to the property) generally stay. Chattels (movable items) only stay if listed.

Common inclusions: stove, oven, dishwasher, light fittings, blinds, curtains, TV antenna.

Watch for:

• Vague inclusion wording ("all fitted appliances" without listing them)
• Exclusions you weren't told about, sometimes the vendor reserves a chandelier, garden statue, or pot plants
• Removed appliances that you assumed came with the place

Walk through the property mentally and ask: is this listed?

6. Finance clause

Most contracts allow you to make the purchase subject to finance, if your loan is rejected, you can withdraw.

Check:

• The named lender, usually one specific bank. If you change lenders, the clause may not protect you
• The amount of finance, must match what you actually need
• The date by which finance must be approved, usually 14 to 21 days

If the finance date is too tight, you may be forced to commit before your bank says yes. If your lender is wrong, you have no protection.

7. Building and pest inspection clause

A "subject to inspection" clause lets you withdraw if a building or pest inspection reveals major issues. The wording matters:

• "Satisfactory to the purchaser", gives you broad discretion
• "Major structural defects only", narrow definition, may not cover issues you care about
• No clause at all, you've waived this protection

Auction contracts usually exclude this. Private treaty contracts can include it if you negotiate it in.

8. Owners corporation special levies

For apartments and units: ask if any owners corporation special levies are pending. The Section 32 should disclose this, but check the contract too. A $40,000 façade repair levy can land on you within months of moving in.

9. GST on new builds

Newly built properties or commercial conversions can attract GST on the purchase price. The contract should clarify:

• Is the price GST-inclusive or exclusive?
• Is the margin scheme used?

A 10% GST surprise on a $700k property is $70k you weren't expecting.

10. Hand-written or last-minute changes

Pen-and-paper amendments, initialled by both parties, are legally binding. If the vendor's agent slips in a hand-written change just before signing, stop and read it. Don't sign anything that's been modified without understanding every word.

What to actually do

When you receive a contract:

1. Read it once yourself. Don't skip the special conditions.
2. Mark everything you don't understand.
3. Send it to your conveyancer. Their fee is small compared to the cost of missing a clause.
4. Ask for changes if needed. Many things can be negotiated before signing, almost nothing can be changed after.

The contract is signed once, but you live with its terms for decades. Treat the day of signing as the most important reading day of the whole process.

Sources

• Sale of Land Act 1962 (Vic): the law governing the contract of sale, cooling-off, deposits, and section 27 early deposit release.
• Consumer Affairs Victoria: Buying property by private sale: the regulator on the contract, cooling-off, and its exceptions.

Sources verified 25 July 2026.

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Unstated's reports flag contract issues alongside the Section 32 review, so you know exactly what to raise with your conveyancer before signing.