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I'm a little confused, having never purchased a house in Queensland. Am I correct in assuming that the seller signs the contract, then the purchaser puts the price they want and also signs? Surely that is a crazy way of doing it, and open to this kind of mess? If you have already signed...

I would have to say that the first people who signed the contract for the higher amount have the place. In fact, you should have exchanged contracts by now, shouldn't you?

Obviously a Qld thing. I have never done that, but my purchases have been confined to NSW, VIC and TAS.