Display Home Sales Process for AU Residential Builders

What it is

A display home is a fully built example home a residential builder uses to sell house designs to future buyers. The display home itself is usually leased back from a developer for two to five years, then sold. The sales process is the path from a walk-through to a signed building contract on the buyer block.

Display home selling sits inside the ACL and inside each state domestic building law. Both apply at once. The ACL governs the marketing and any pre-contract representations the sales consultant makes. State legislation governs the building contract that follows.

The typical sales path

A buyer usually moves through six stages.

1. Walk-through and brochure

The buyer visits the display home, often on a weekend. The sales consultant takes contact details, hands over a brochure and price list and walks the buyer through inclusions. Nothing is signed. No money changes hands.

2. Initial preliminary agreement

Many builders use a non-binding interest form here. Some call it an Expression of Interest, others a Customer Service Agreement. It is not the building contract. It records the buyer block, the chosen design, agreed variations and a holding deposit, often $1,000 to $5,000.

3. Preliminary works agreement (PWA)

The next step is usually a paid Preliminary Works Agreement covering site survey, soil test, engineering, energy report and council pre-lodgement. Fees run from $3,000 to $10,000 and are credited against the contract price if the buyer proceeds.

4. Tender presentation

The builder returns with a full tender that lists the contract price, inclusions, exclusions, PC and PS items, allowances and a draft contract schedule. This is where price certainty actually appears.

5. Building contract signed

The buyer signs the HIA, MBA or state-standard building contract. From this point the state cooling-off rules apply.

6. Finance and pre-construction

Final finance is locked in, plans are submitted to council or a private certifier, and the build is scheduled.

Cooling-off rights under state law

Each state gives the buyer a statutory cooling-off period that starts after the building contract is signed. Display home walk-throughs do not trigger cooling-off because no contract has been signed yet. The clock starts when the contract is signed and the buyer has received a signed copy plus any prescribed consumer guide.

NSW

For residential building contracts over $20,000, the Home Building Act 1989 gives the buyer five clear business days to rescind. The contract must include a notice setting out this right.

Victoria

The Domestic Building Contracts Act 1995 gives the building owner five business days to withdraw, starting the day after the buyer receives the signed contract.

Queensland

Under the Domestic Building Contracts Act 2000, the buyer has five business days from the day after they receive a signed copy of the contract plus the QBCC Consumer Building Guide if the contract is over $20,000.

Western Australia, SA, Tasmania, ACT and NT

WA and Tasmania have no statutory cooling-off period for new home building contracts but the builder may grant a contractual one. SA, ACT and NT each have their own short periods set out in their state building or fair trading laws. Always check the current state instrument before relying on a number.

How cooling-off interacts with earlier deposits

A statutory cooling-off period applies to the building contract only. Money paid earlier under an EOI or PWA is governed by whatever the buyer signed at that stage. If the EOI says the $5,000 is non-refundable after seven days, that term binds the buyer, subject to ACL unfair contract terms rules under section 23. If the PWA covers real work already done (soil test, survey) the builder can keep the reasonable cost of that work.

ACL overlay on the sales process

Every representation the sales consultant makes during the walk-through and tender meeting is in trade or commerce. Section 18 catches misleading conduct. Section 29 catches specific false representations about price, sponsorship, approval, performance characteristics, place of origin or buyer rights. A statement like "you cannot cancel once you have paid the EOI" is false if state law or the EOI itself gives the buyer a withdrawal right, and it exposes the builder to a section 29 claim.

What buyers and builders should document

Builders should give every walk-through visitor a written inclusions list, a written exclusions list, a sample tender and a one-page summary of EOI, PWA and contract stages. Buyers should keep the brochure they were handed, the price list current on the day of the walk-through and every email and SMS from the sales consultant. Both sides benefit when the path from walk-through to contract is written down in plain English.