Again, this is taken from last weekend's Domain, published by The Age newspaper. There are three documents involved:
1. Sale authority.
This is a legally binding contract that outlines the sale of your house through the appointed agent. Take note: 1) there is no set industry-standard for the agent's commission; 2) the seller is liable for advertising expenses even if a sale doesn't happen; 3) it is illegal for the agent to underquote the seller's reserve price.
2. Vendor's statement (or Section 32).
Typically prepared by a conveyancer or solicitor, it must be complete and signed by the seller. Take note: prospective buyer must receive a complete and signed vendor's statement or else the contract of sale would be void.
3. Contract of sale.
Verbal offer is not binding. A contract of sale identifies the buyer, seller, particulars of the property, settlement date, deposit amount, sale value, and which chattels to go with the house. Note that: 1) buyers can request a sale to be subject to finance approval, sale of their own property, or building inspection; 2) buyers have a cooling off period of three business days (can back out subject to a small penalty), unless the property is bought within three business days of a scheduled auction or if they took legal advice before signing the contract. Auctions can have no cooling off period and no attached conditions.