Purchasing a new home is a big decision! That’s why many sale processes include a brief cooling off period to help you ensure you’ve made the right choice.
By understanding what the cooling-off period means and what your rights are, you can ensure that you make the most of every opportunity to think about your decision. This can help you have confidence as a buyer and reduce stress when purchasing a property.
So what is the cooling-off period? How could it apply to your purchase? Here’s everything you need to know.
What the cooling off period?
The cooling off period is a short period of time during which you can rethink your property purchase and withdraw from sale without any major legal or financial consequences.
Usually lasting for up to 5 business days, the cooling off period allows you to think about your choices and ensure that your purchase is the right decision.
It means that you don’t have to worry about acting in the heat at the moment. You can think carefully and strategically about purchasing a home and ensure that you are ready to buy before you are fully committed.
Why you might change your mind
There are many reasons why you might change your mind about a property you previously wanted to purchase.
You may want to withdraw from sale if a building and pest inspection finds fault. You may also need to withdraw if your loan is unapproved or if your financial situation changes. Sometimes, buyers withdraw because a new property has become available or because they have simply had a change of mind.
How does cooling off work?
Usually, a, cooling off period only applies to a private treaty for a home purchase. This means it is not usually applicable as part of an auction sale unless otherwise stated. The cooling off period begins on the day that you receive your signed agreement.
In most cases, the cooling off period means that you have until 5pm on the last day of the stipulated period to change your mind about purchasing a home. If you do change your mind, you’ll need to contact all relevant parties immediately in writing and be clear about your decision to withdraw from the sale.
The cooling off period also allows time for final inspections and compliance checks that could detect problems with the property you’re purchasing. A poor building report could be a reason for withdrawing.
If you do decide to withdraw your offer, you may incur a fee for doing so, depending on where you are located and the terms of your agreement.
It’s important to remember that the time you have for cooling off will vary based on where you live.
For example, the cooling off period typically lasts 5 business days in Queensland, New South Wales, and the Australian Capital Territory. In the Northern Territory, the cooling off period is 4 business days if the purchaser isn’t represented by a conveyancer or solicitor. In Victoria, it is just 3 business days, and in South Australia, it is 2. In Tasmania, there is often no cooling off period, while a cooling off period only applies in Western Australia if it is included in the contract.
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