Enjoy 10% OFF your first listing. Receive your personal promo code: Signup Now. Remaining.

Limited time offer. Enjoy 10% OFF your first listing. Receive your personal promo code here: Signup Now

Days
Hours
Minutes
Seconds

The PropertyNow Blog

Cooling-off periods for property: 4 things you should know

a man and a woman happily getting the keys from an agent

cooling off period

Property tends to be one of our greatest investments. As a result, buying property is a huge decision – especially for first-time or novice buyers. Mistakes can be made. Cooling-off periods are designed to ease the pressure and give buyers a chance to walk away from a sale if problems arise or they change their mind.

What is a cooling-off period?

A cooling-off period is a set number of days after a contract has been signed when a buyer can cancel the transaction. Cooling-off periods are essential to buyers who don’t have pre-approved lending in place with their bank or financial institution, and they offer buyers a little more leeway when making such a large purchase.

However, cooling-off periods vary state to state and don’t apply under every situation:

  • Depending on the state, buyers may be liable to pay a termination fee
  • There’s no cooling-off period for properties purchased at auction
  • Buyers can elect to waive their right to a cooling-off period
  • Tasmania has no legislation for cooling-off periods

Cooling-off periods state by state

Each state has their own policies in place regarding cooling-off periods, including the defined number of days:

Victoria: 3 business days. Buyer must pay 0.2% of the purchase price to the seller.
NSW: 5 business days. Buyer forfeits 0.25% of the purchase price to the seller.
QLD: 5 business days. Seller keeps 0.25% of the purchase price from the buyer’s deposit.
SA: 2 business days. Deposits paid over $100 are refunded in full, however the buyer forfeits their holding deposit.
WA: No cooling-off periods apply unless specified within the sale contract.
ACT: 5 business days. Buyer forfeits 0.25% of the purchase price to the seller.
NT: 2 business days. Purchase deposit and holding deposit are refunded to the buyer.
TAS: No cooling-off periods apply to the sale of any property in Tasmania.

Check out your local consumer affairs or real estate institution to understand the particular rules associated with cooling-off periods in more detail.

Why a buyer might back out during a cooling-off period

Because cooling-off periods are so short, it’s unusual for buyers to use this defined period to walk away from a sale – but, it can happen. In most cases, it can be related to buyers having their loan application turned down or delayed if they haven’t organised a pre-purchase loan. Sometimes, it can be related to issues that arise from a building or pest inspection. Or, perhaps they simply get cold feet.

What happens after a cooling-off period?

Once the cooling-off period is over, a buyer can no longer back out of a contract for sale without significant financial penalties. The contract for sale specifies what a buyer is liable to pay should they pull out after the cooling-off period. Such costs may include their initial deposit or expenses paid by the seller, such as legal or conveyancing fees and building valuation and inspection fees.

The next and final stage of the property sale process is settlement day.

Agent Handing Over the Keys in Front of Business Offi

How to sell commercial property without a realtor: A comprehensive guide

Anyone who says it isn’t easy to learn how to sell a commercial property without a realtor is selling something...

Realtor with sale signboard

Selling a house online? Our easy step-by-step guide shows you how.

Learn everything you need to know about selling your house online in just 5 simple steps Selling a house can...

A 5-step approach to selling a house without an agent to get the best return

Why spend tens of thousands on agent commissions? Selling a house without an agent is steadily gaining momentum among sellers...

a woman pointing to a floorplan on her laptop's screen

6 Impacting Factors That Bring Property Value Down

Property prices around the world rise and fall in cycles, impacted by influences such as the economy, interest rates, and...

Showcase your home through a 3D virtual house tour

When it’s difficult for buyers and tenants to view your property in person, why not let them view it from...

a hand holding a pink ceramic pig

3 Things You Should Fix Before Selling Your Home

When it’s time to sell, you want to maximise your property’s sale potential. But do you know the one thing...

a man and a woman getting the keys to their new home

Property Settlement: What Happens and What Should You Do?

When selling your home, settlement day is the end of a chapter and the start of a new chapter. You’re...

a cube-shaped modern house in red, black, and white colours

The hidden fees for selling a house

When selling property, many people use their final sales price as their determining success factor, forgetting to detract all the...

a cartoon of a man using a giant umbrella as a shield against viruses

Open House During Pandemic – How to Manage It

Not sure how to manage your private inspection or open house during a pandemic? We've got all the answers for...