Contract of Sale Explained: A Victorian Buyer’s Guide

By Andrew Paterson

You have found the place, the offer is in, and now a thick stack of paper lands in your inbox.

Related: when risk passes before settlement

This is the moment plenty of Geelong buyers freeze. So let me walk you through the contract of sale explained for Victoria, clause by clause, in plain terms.

I am a mortgage broker, not a lawyer. So think of this as the map, not the legal advice. Your conveyancer or solicitor handles the sign-off.

But there is a big part of this document that lands squarely in a broker’s lap. That is the finance clause, and it is where deals quietly fall over.

Two documents, not one

First thing to sort out. When people say “the contract” they usually mean two separate documents bundled together.

• The Section 32 (vendor’s statement) is a legal disclosure document. The seller signs it and must give it to you before you sign anything.
• The Contract of Sale sets the commercial terms. Price, deposit, settlement date and any special conditions.

They almost always arrive together. But they do different jobs, and mixing them up trips people up.

The Section 32 sits under the Sale of Land Act 1962 (Vic). The vendor is legally responsible for its accuracy.

It tells you what you are actually buying. Read it hard.

What lives inside the Section 32

A vendor’s statement should cover the boring things that cost you dearly if hidden:

• Title details and any encumbrances (easements, covenants, caveats)
• Mortgages over the property that must be discharged
• Rates, land tax and outgoings
• Planning and zoning information
• Building permits issued in the last seven years
• Owners corporation details if it applies
• Whether the property sits in a Growth Areas Infrastructure Contribution zone

Here is a point most generic articles skip. If the seller fails to disclose certain matters, you may have a right to rescind.

Under section 32K you can pull out before settlement without the cooling-off penalty where required disclosure was missing or wrong. That is separate from cooling-off, and your conveyancer will know if it applies.

The Victorian contract just changed

This matters in 2026. The LIV/REIV Contract of Sale of Land was reissued effective 1 September 2025, replacing the January 2024 edition.

Sellers are not forced to use the new version. So both editions are circulating right now.

Check the month and year printed at the foot of the contract. The general condition numbers and some timeframes differ between editions.

Two changes worth knowing:

• Off-the-plan settlement moved from 14 days to 21 days after the vendor gives written notice that the plan of subdivision is registered.
• The domestic building insurance notice period dropped from 21 days to 14 days before settlement.

If an article you are reading describes the “January 2024 contract” without a caveat, treat it as possibly dated.

Cooling-off in Victoria: 3 clear business days

Victoria gives private-sale buyers a cooling-off period of 3 clear business days under section 31 of the Sale of Land Act.

Weekends and public holidays do not count. The clock starts after you sign.

Change your mind in that window and you can walk away. But it costs.

The penalty is the greater of $100 or 0.2% of the purchase price. Some real numbers:

Purchase price	Cooling-off penalty (0.2%)
$575,000 (Corio house)	$1,150
$700,000	$1,400
$793,000 (Geelong median)	$1,586
$1,000,000	$2,000

Not cheap. But cheaper than being locked into the wrong purchase. If you are still building up your deposit savings, that penalty is worth keeping front of mind before you sign anything.

When cooling-off does NOT apply

This is the part that catches people out. Cooling-off has hard exceptions:

• Auction purchases. No cooling-off at all.
• Sales within 3 clear business days before or after a publicly advertised auction.
• Commercial or industrial property.
• Corporate or estate-agent buyers.
• Where you waived the right after getting independent legal advice (a section 31(4) certificate).

The auction one is huge. If you are bidding at a Geelong auction, the contract is unconditional the moment the hammer falls.

No cooling-off. No subject-to-finance. No subject-to-building-and-pest.

So all your due diligence, contract review, inspections and finance pre-approval must be done before you raise your hand. Get us and your conveyancer working early, and make sure your pre-approval is current and not sitting close to expiry.

The subject-to-finance clause (this is my patch)

The standard contract carries a subject-to-finance general condition. It only applies to private sales, and only if the particulars are filled in.

Here is the trap. It is not an easy escape hatch.

To use it, you must:

1. Apply for finance immediately.
2. Apply for the exact loan amount and the specific lender named in the particulars.
3. Do everything reasonably necessary to get approval.
4. Serve written notice on the vendor, with written evidence of rejection, within the required time. That is commonly within 2 days after the approval date.

Miss any step and the contract becomes unconditional. Your deposit is at risk.

One more critical point. A letter from your broker is generally not enough.

You need a letter from the specific lender listed in the contract, stating in writing that finance was not approved. Courts have knocked buyers back for using the wrong lender or the wrong loan amount. Understanding the difference between pre-approval and conditional approval helps explain why lenders take this final step seriously.

Typical finance periods

The subject-to-finance period is commonly 14 days. You will also see 7 or 21 days, with the practical range running 7 to 28 days depending on your lender and situation.

Shorter looks attractive to a seller. But rush it and you might not have your formal approval in time.

This is where a broker earns their keep. We work backwards from the finance date and line up your application so the approval lands with room to spare.

A worked example

Say you buy in Leopold for $710,000. You sign on a Saturday with a 14-day finance clause.

• Finance date falls 14 days later.
• Your lender assesses the application and issues formal (unconditional) approval two days before that date. Good result.
• You confirm to the vendor’s agent in writing that finance is satisfied.

Now the flip side. The lender declines, or the valuation comes in low at $685,000 and creates a shortfall. This is exactly the sort of scenario covered when we explain how lenders calculate borrowing power, since a low valuation can shrink what a lender is willing to fund.

• You obtain the lender’s written decline letter.
• Your conveyancer serves written notice with that evidence within 2 days of the finance date.
• The contract ends and your deposit comes back.

Skip the written notice, or lean on a broker note instead of the lender’s letter, and you could be forced to settle a loan you do not have.

One more timing rule. Leave a window of at least 14 days between the finance date and the settlement date, so the lender has time to prepare for settlement.

Subject to building and pest

Another common condition in private sales. Again, narrower than people assume.

Under the standard building condition, you can only terminate if the report finds a major structural defect. The report must come from an architect or a building practitioner registered under the Building Act 1993 (Vic).

The pest condition requires a report from a pest control operator licensed under Victorian law, finding a major infestation.

Minor defects do not let you walk. A cracked path or a dated kitchen is not grounds to terminate.

The standard building condition typically runs within 14 days of signing. Notice must be served strictly within time.

At auction none of this exists. Book your inspections before auction day.

Special conditions and inclusions

Special conditions are extra clauses added to the standard contract. They can help you or hurt you, so read every one.

Common examples:

• A longer or shorter settlement
• Rent-back to the seller after settlement
• Access for early works or repairs
• Vendor obligations to fix or remove items

Then there are inclusions and exclusions. This sounds minor until settlement day, when the dishwasher is gone.

List what stays. Where it matters, name the make and model. Items that spark disputes:

• Dishwasher and other freestanding appliances
• TV wall brackets
• Curtains and blinds
• Sheds and garden structures
• Solar panels and batteries

If it is written into the contract, it stays. If it is not, expect an argument you will probably lose.

Settlement date

The settlement date sits in the particulars of sale. Standard settlements in Victoria commonly run 30, 60 or 90 days.

Pick a date that gives your lender room. Formal approval, loan documents, and the lender’s own settlement prep all take time.

Set it too tight and you risk a penalty for late settlement. Set it sensibly and the process is calm. It also pays to budget for what comes after settlement, since our breakdown of the hidden costs of owning a home covers the expenses buyers often forget in the excitement of exchanging contracts.

We factor this in when we map your finance timeline. The finance date, the loan approval and the settlement date all need to talk to each other.

Conveyancer or solicitor?

For most straightforward Geelong home purchases, a licensed conveyancer handles the job under the Conveyancers Act 2006 (Vic).

A solicitor is the better call for complex matters. Think deceased estates, disputes, unusual title issues or company structures.

Budget roughly $900 to $2,200 in professional fees, plus disbursements of around $200 to $500.

Do not settle for a lawyer “glancing” at the paperwork. You want a proper review of both the contract and the Section 32.

Timing matters. Get the review done before you sign, or at the very least the day after, so two of your three cooling-off days remain to act on any flags.

Your pre-signing checklist

• Confirm the contract edition (check the date at the foot)
• Read the full Section 32 for encumbrances, planning and permits
• Get your conveyancer or solicitor to review both documents
• Confirm your finance clause has a realistic day count
• Check the named lender and loan amount in the finance particulars
• Book building and pest inspections (essential before auction)
• List every inclusion and exclusion in writing
• Choose a settlement date your lender can actually meet
• Arrange building insurance early if your lender requires it from the contract date

Where the finance clause is concerned, talk to us before you sign. Getting pre-approval sorted and the day counts right is the difference between a clean settlement and a scramble. If you are still a few months out, our 6-month loan-ready countdown is a good place to start getting your finances in order before the contract stage arrives.

Important disclaimers

This is general information only and not legal or financial advice. Property and mortgage law is complex and situation-specific. Engage a licensed conveyancer or solicitor and a licensed mortgage broker before you sign.

Figures, thresholds, cooling-off penalties, general condition numbering and dollar amounts change and can vary by transaction. Verify against the current Sale of Land Act 1962 (Vic), Consumer Affairs Victoria guidance and the specific contract in front of you. The standard contract was updated on 1 September 2025.

The standard LIV/REIV general conditions for finance, building and pest only apply where that standard contract is used and the relevant particulars are completed. Sellers may use non-standard or special conditions.

Subject-to-finance, building and pest conditions require strict compliance with the contract’s procedure and timeframes. Failure to serve correct written notice with supporting evidence in time can make the contract unconditional.

Cooling-off rights do not apply to auction purchases, purchases within 3 clear business days before or after a publicly advertised auction, commercial or industrial property, corporate buyers, or where waived after independent legal advice.

Geelong market figures vary by provider and methodology and are point-in-time snapshots, not valuations. As we are not lawyers, we cannot determine whether any clause is legally sufficient for your circumstances. Obtain your own professional advice.

Frequently asked questions

What is the difference between the Section 32 and the contract of sale in Victoria?

The Section 32, or vendor’s statement, is a legal disclosure document the seller must give you before you sign. It covers title, encumbrances, rates, planning and permits. The contract of sale sets the commercial terms: price, deposit, settlement date and special conditions. They usually arrive together but do different jobs, so read both carefully with your conveyancer.

How long is the cooling-off period in Victoria?

For private sales it is 3 clear business days under section 31 of the Sale of Land Act 1962 (Vic). Weekends and public holidays are excluded. If you withdraw in that window the penalty is the greater of $100 or 0.2% of the purchase price. Cooling-off does not apply to auction purchases.

Is a subject-to-finance clause an easy way to get out of a contract?

No. You must apply for the exact loan amount and named lender, use best endeavours to obtain approval, and serve written notice with the lender’s written rejection within the required time, commonly within 2 days of the finance date. A broker note is generally not enough. You need a decline letter from the specific lender listed in the contract, or the contract can become unconditional.

Can I walk away if a building inspection finds problems?

Only in limited cases. Under the standard building condition you can terminate if the report finds a major structural defect and is prepared by an architect or a registered building practitioner. Minor defects do not qualify. The window is typically 14 days from signing and notice must be served strictly in time. At auction there is no building condition at all.

When should I involve a mortgage broker in the contract process?

Before you sign. We help set a realistic finance clause period, confirm the named lender and loan amount in the particulars, and align your finance date with your settlement date. Getting pre-approval sorted early is especially important at auction, where the contract is unconditional and there is no subject-to-finance protection.