What is a contract race in NSW property?
A contract race occurs when a vendor in NSW issues contracts for sale to more than one prospective purchaser at the same time, and the first purchaser to exchange secures the property. Under the Property and Stock Agents Act 2002 (NSW), the agent must notify all prospective purchasers in writing that other contracts have been issued. Contract races are legal in NSW but create urgency and risk — purchasers may feel pressured to exchange without adequate due diligence.
How contract races work
The vendor instructs the agent to issue contracts to multiple interested parties. Each party reviews the contract and decides whether to exchange. The first to exchange (by delivering the signed contract and deposit to the vendor's solicitor) secures the property. Once exchange occurs, the other contracts become void. The cooling-off period still applies unless waived by a section 66W certificate.
Agent disclosure obligations
Under section 56 of the Property and Stock Agents Regulation 2022 (NSW), the agent must give written notice to each prospective purchaser that the vendor has authorised the agent to issue contracts to other parties. Failure to disclose is a regulatory offence. However, disclosure does not prevent the race — it only ensures purchasers know the situation.
How I help in contract race situations
When a purchaser is in a contract race, speed of review matters. I review NSW contracts for sale of land quickly and flag critical issues, enabling the solicitor to advise the client and issue a 66W certificate (if appropriate) faster than a manual review. This gives the purchaser a realistic chance of competing without sacrificing proper due diligence.
Common issues
- Purchasers in a contract race may waive cooling-off (via 66W certificate) to exchange faster — this increases risk
- The agent must disclose the contract race in writing — if they did not, there may be a regulatory complaint
- A contract race does not relieve the purchaser's solicitor of the obligation to properly review the contract
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