Once a seller accepts a buyer's offer on a Queensland property, there's a step that often causes confusion: the Heads of Agreement. It isn't the final contract, but it isn't nothing either — here's exactly what it is and how it fits into the process.
What a Heads of Agreement actually is
A Heads of Agreement is a written summary of the terms both parties have agreed to — purchase price, deposit, settlement period, and any conditions like finance or building & pest — signed by buyer and seller to confirm the deal before the formal Contract of Sale is drawn up. Think of it as documenting "we agree on these terms," rather than the legally binding sale document itself.
Why it exists as a separate step
The formal Contract of Sale is a detailed legal document that a licensed conveyancer or solicitor prepares, incorporating standard clauses, title details, and any special conditions correctly drafted in enforceable legal language. That takes time to prepare properly. The Heads of Agreement lets both parties lock in the commercial terms immediately — so the deal doesn't fall through while the formal paperwork catches up — without either side needing to wait on a solicitor before confirming they're both genuinely committed.
Signing order matters
Typically the buyer signs first, then the seller countersigns once the buyer's signature is confirmed. This sequencing protects the seller from countersigning (and effectively taking the property off the market) before knowing the buyer has actually committed.
What happens once both parties have signed
Once both signatures are in place, the matter is handed to a conveyancer or solicitor to prepare the formal, legally binding Contract of Sale based on the agreed terms. This is also typically the point at which any nominated conveyancer is formally engaged and briefed on the transaction.
Is the Heads of Agreement legally binding?
It documents an agreement in principle, but the parties' full legal rights and obligations are set out in the formal Contract of Sale once it's executed — including the buyer's statutory cooling-off rights, which apply to the formal contract. Treat the Heads of Agreement as a serious commitment, not as something either party can walk away from casually, but understand that the detailed legal mechanics live in the contract that follows.
What sellers should check before signing
Before countersigning, check that every commercial term matches what you actually agreed to verbally or in negotiation — price, deposit amount and timing, settlement date, and every condition (finance days, building & pest days, any special conditions). Errors are far easier to fix at this stage than after the formal contract is drawn up.