NSW contract of sale: what it contains, what to check, and what you can negotiate

The contract of sale is the legally binding document at the centre of every NSW property transaction. Understanding what it must include, what buyers and sellers should look for, and what can be changed before exchange helps you move through the process with confidence.

Which situation describes you?

The core contract is the same for all NSW buyers, but key rules and risks differ by situation. Find yours below.

Situation	Key contract difference	Go to
First home buyer	5-day cooling-off period applies (s66S Conveyancing Act 1919). Finance and building conditions can be negotiated. Stamp duty concessions may reduce or eliminate duty on properties up to $1M.	First home buyer guide
Buying at auction	No cooling-off period. Full 10% deposit paid on auction day. Contracts signed unconditionally on the spot. Pre-auction contract review by your conveyancer is essential -- you cannot renegotiate after the hammer falls.	Auction buying guide
Buying off-the-plan	Sunset clause (date by which the building must be registered). GST withholding obligation at settlement (buyer remits 1/11th of price to ATO). Contract may be exchanged years before completion.	Off-the-plan guide
Buying strata (apartment or unit)	Strata inspection report must be attached to the contract (s182 Strata Schemes Management Act 2015). Check levies, sinking fund balance, and any outstanding special levies before exchange.	Strata buying guide
Selling and buying at the same time	Both transactions require coordinated settlement dates. A subject-to-sale condition on your purchase contract is rarely accepted. Bridging finance or a simultaneous settlement via PEXA is the more common approach.	Selling in NSW · Exchange of contracts
Refinancing only (no purchase)	No contract of sale is involved. Your lender's solicitor prepares mortgage documents. Your conveyancer handles the discharge of your existing mortgage and registration of the new one. Standard conveyancing rules apply.	Refinancing guide

These are generalisations. Your conveyancer or solicitor advises based on your specific contract and circumstances.

General information about NSW property law, not legal advice. Every transaction is different. Before signing or exchanging a contract, get advice from a licensed conveyancer or solicitor.

What is a contract of sale?

A contract of sale is the written agreement between a buyer (purchaser) and a seller (vendor) for the transfer of property in NSW. Once both parties have signed and dated their respective copies and the contracts are physically exchanged (or exchanged electronically), the transaction becomes legally binding on both sides.

In NSW, the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation 2022 (NSW) govern the form and content requirements for contracts of sale of residential property. The regulation prescribes which documents must be attached before the contract can be offered for sale.

Most residential property contracts in NSW use a standard form prepared by the Law Society of New South Wales and the Real Estate Institute of NSW. Standard terms cover the price, deposit, settlement date, included fittings and fixtures, and what happens if either party defaults. A conveyancer or solicitor may also add or remove special conditions.

Documents the vendor must attach

Under the Conveyancing (Sale of Land) Regulation 2022 (NSW), the vendor's conveyancer or solicitor must attach several documents to the contract before it is offered for sale. These disclosures give the buyer information about the property's legal, planning, and physical status.

The required attachments include:

• Title search: confirms the current registered owner, whether there is a mortgage, and any easements, caveats, or other interests registered on the title.
• Section 10.7 planning certificate: issued by the local council under the Environmental Planning and Assessment Act 1979 (NSW). It shows the zoning of the land, any special overlays, heritage listings, and whether the land is flood or bushfire-affected. A full (5) certificate includes additional information about pending development applications and notices affecting the land.
• Sewerage and drainage diagrams: show the location of sewer lines on the property, which affects where you can build.
• Strata inspection report (strata properties only): for apartments and townhouses in a strata scheme, a copy of the records inspected under section 182 of the Strata Schemes Management Act 2015 (NSW) must be attached. This reveals the financial position of the owners corporation, any outstanding levies or special levies, and building defect or insurance information.
• Swimming pool compliance certificate (if applicable): if the property has a swimming pool, the vendor must provide evidence of registration and, in certain cases, a valid compliance certificate under the Swimming Pools Act 1992 (NSW).

If required documents are not attached, a buyer may have the right to rescind (withdraw from) the contract within a statutory cooling-off period. The specific rights depend on which document was missing and whether the transaction proceeded to exchange. Advice from a conveyancer is essential before relying on a rescission right.

What buyers should check

A buyer's conveyancer will review the contract and raise any issues before you exchange. However, it helps to understand what you are looking for. Common issues in NSW contracts include:

• Easements and restrictions on title: some titles carry easements that allow others to use part of the land (drainage, right of way), or restrictions that limit what you can build. These are disclosed in the title search and the contract body. They can significantly affect the property's development potential.
• Inclusions and exclusions: the contract will specify what is included in the sale (built-in appliances, blinds, light fittings). Items that are not listed as included may be removed by the vendor. Check the list carefully against what you saw at inspection.
• Settlement date: the standard period is 42 days (6 weeks) from exchange, but this is negotiable. If you need a longer or shorter settlement period, this is discussed and agreed before exchange.
• Deposit amount: the standard deposit in NSW is 10% of the purchase price, paid at exchange. A smaller deposit (typically 0.25%) can sometimes be agreed, with the balance due at settlement. A smaller initial deposit reduces your upfront cash requirement but may make your offer less attractive to a vendor.
• Finance and building inspection conditions: these are not standard in NSW contracts and must be specifically negotiated. Unlike some other states, NSW contracts are often exchanged unconditionally, which means you need your finance pre-approved and inspections completed before exchange.
• Strata financials (for strata): the strata inspection report will show outstanding levies, past-due maintenance, or upcoming special levies. If the owners corporation has a history of underfunding, you may inherit maintenance costs after purchase.
• Known defects: vendors have a duty to disclose certain defects (e.g. a notice under an environmental planning instrument), but general wear and caveat emptor (buyer beware) applies to physical defects. Building and pest inspections are separate to the conveyancing process and are the buyer's responsibility to arrange.

What can be negotiated

The contract of sale is a starting point, not a take-it-or-leave-it document. Before exchange, your conveyancer can request changes to standard terms or add special conditions. Common areas of negotiation include:

• Settlement period: standard is 42 days, but 30 days (for a faster settlement) or 60 to 90 days are sometimes agreed depending on both parties' circumstances.
• Deposit amount: the vendor may agree to a reduced deposit at exchange, particularly if you are a genuine buyer and there is competitive interest in the property.
• Special conditions: finance conditions, subject-to-sale conditions (if you need to sell your existing home first), and early access arrangements can be requested. They are not always granted, especially in competitive markets.
• Inclusions: you can ask for specific items to be included (a dishwasher, outdoor furniture, or a garden shed) or excluded (a feature light fitting the vendor wants to keep).
• Adjustments for existing defects: if an inspection reveals a material defect that was not apparent at the time of the offer, buyers sometimes renegotiate the price or ask for a vendor repair as a condition. This is a commercial negotiation, not a legal right.

Your conveyancer or solicitor advises you on what is reasonable to request given the market conditions and the strength of your negotiating position.

Common special conditions

Special conditions are clauses added to the standard contract to suit the specific circumstances of the transaction. They must be drafted carefully so they are enforceable. Common examples include:

• Finance condition: makes exchange subject to formal loan approval from a named lender by a specified date. If approval is not obtained, the buyer can rescind and receive their deposit back. Not standard in NSW (unlike Queensland) but can be negotiated.
• Subject to sale: exchange is conditional on the buyer selling their existing property. Rarely accepted by vendors unless there is no other buyer.
• Early access: allows the buyer to access the property before settlement for specific purposes (e.g. taking measurements, obtaining quotes). Early access does not transfer ownership and carries conditions.
• Sunset clause (off-the-plan): for off-the-plan contracts, a sunset clause sets a date by which the development must be registered. If the date passes without registration, either party may have rights to rescind (subject to Part 4, Division 10 of the Conveyancing Act 1919 (NSW), introduced by the Conveyancing Amendment (Sunset Clauses) Act 2015, which restricts vendors from using sunset clauses manipulatively).

Exchange vs settlement: what is the difference?

These two terms are often confused.

Exchange of contracts is the moment when both parties sign their respective copies of the contract and exchange them (physically or electronically). This is the point at which the transaction becomes legally binding. Before exchange, either party can walk away without penalty. After exchange, withdrawal exposes the defaulting party to legal consequences, including forfeiture of the deposit (by the buyer) or a damages claim.

Settlement (completion) is the later date, typically 42 days after exchange, when the purchase price is paid, mortgages are registered or discharged, and legal ownership transfers to the buyer. The buyer receives the keys at settlement. Settlement in NSW is conducted electronically via the PEXA platform, which has been mandatory for most residential transactions since 2019.

Between exchange and settlement, the buyer carries out final inspections, arranges building insurance (usually from the date of exchange), and prepares finance for settlement day. The vendor keeps the property in the same condition as at the date of exchange.

The vendor's obligations

The vendor must:

• Provide a contract with all required attachments before offering the property for sale.
• Maintain the property in the same general condition between exchange and settlement.
• Disclose any change in the property's physical condition that occurs after exchange (e.g. storm damage, fire).
• Attend settlement (through their conveyancer) and transfer title free of mortgage unless otherwise agreed.
• Provide vacant possession on the settlement date, unless the property is sold tenanted and a tenancy condition is in the contract.

Common problems with contracts

• Missing disclosure documents: a vendor who offers a contract without the required attachments may give the buyer rescission rights under the regulation. The specific remedy depends on which document was missing and the timing.
• Incorrect inclusions list: if the contract lists items as included that are not present at settlement, the buyer may have a claim. Document the property's condition at inspection and check the inclusions list carefully.
• Title defects: caveats, unregistered interests, or encumbrances on title can delay or complicate settlement. Your conveyancer checks title and raises any issues with the vendor's solicitor before settlement.
• Delayed settlement: if either party is not ready to settle on the agreed date, the other party can issue a Notice to Complete under the contract, giving 14 days to settle. Failing to settle after a valid Notice to Complete entitles the innocent party to terminate and claim damages. The notice period must be reasonable in the circumstances; 14 days is the accepted industry minimum in NSW, but the parties may agree a different period.

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