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Understanding Cooling Off Periods

Buying real estate can be an emotional experience. As a first home buyer, you might feel quite stressed…is it the right suburb?… is it the right house? That’s why most Australian states and territories allow a cooling-off period after a sale is completed.

A cooling-off period is a set number of days after you make a purchase in which you can decide not to proceed with the purchase.  If you take the option to cancel your legal agreement, you may have to pay the seller a small fee, but in some circumstances, it can be worth paying the price.

The cooling-off period is not available everywhere or under every circumstance.  For example, there is no cooling-off period for properties purchased at auction.  Similarly, there is no cooling off period in Tasmania.

You can also waive your right to a cooling-off period (but we do not recommend you do this).

 

New South Wales

You have five business days to back out of a contract you have already signed. You will have to pay the seller a termination fee of 0.25 per cent of the purchase price.

Victoria

Allows a three-business-day cooling-off period and the termination fee is 0.20 per cent.

Queensland

The rules are the same as in New South Wales: five business days and a 0.25 per cent fee.

South Australia

You are only given two business days to back out of a contract and must forfeit a small holding deposit of up to $100.

Australian Capital Territory

The cooling-off period is five business days and the termination fee is 0.25 per cent of the purchase price.

Northern Territory

The cooling-off period is four working days and no termination fee is required.

Tasmania

There is no cooling-off period.

 

As soon as you have your contract of sale, we will order a valuation so that we can arrange for your formal approval before contracts have exchanged and you need to pay your 10% deposit.

It’s also a good idea to use your cooling-off period to hire a pest and/or building inspector to make sure there aren’t any hidden surprises!