Ins and outs of cooling off periods

You’ve found the perfect home, you and the seller have agreed on a perfect price, and “all’s right with the world”. Or is it? Excitement and expectations run high when it comes to property purchases and sales but concerns can move in afterwards. This is why cooling-off periods are crucial.

Cold feet or concerns = Cool off relief

As real estate agents, we’re all too aware post-contract doubts and problems occur. Your finances may fall through; unexpected emergencies might crop up, such as losing your job or a death in the family; your conveyancer could detect an issue, or you may simply get cold feet. All these reasons and more are why cooling-off periods exist. These intervals give buyers the chance to cancel a sales contract. While the details differ from state to state – with some not offering cooling-off periods at all – cooling-off periods are usually in place for five business days, starting from the day you receive the signed contract and a deposit is paid. 

Pros and cons

Cooling off periods are a great way out for property purchasers but there are pros and cons to them. If you decide not to buy the home, you will need to pay the seller a termination fee or penalty. Depending on which state you’re in, this can be equivalent to 0.25% of the home’s total sale price. So, it’s important for you to consider whether paying this fee is worth it. If you do decide to terminate the sale, the seller will need a written notice of this decision, usually organised by your conveyancers. If you’re the seller, you will need to refund the deposit within 14 days. A buyer backing out of a sale will also be a highly stressful time for you, with potential buyers often gone to ground after you thought your house was sold. It’s always best not to breathe a sigh of relief – and pop open the champagne – until after the cooling-off period, at least. 

Don’t forget…

Be aware that cooling-off periods only apply to private treaties and not auction sales. For personally negotiated contracts after an auction, these details may be included. Buyers can also request to waive their rights to a cooling-off period or cancel a contract after this time ends. But the latter decision is rarely a good idea as it can be extremely costly, so seek plenty of legal advice from your conveyancer before doing so. The bottom line in all of this is to always be 110% confident and convinced about your purchase before you sign off on it. Don’t let yourself be shaken by 3am doubts. Ensure you organise pre-purchase building and pest inspections and lender approval; ask your conveyancer plenty of questions; surround yourself with sensible friends and family who’ve bought properties themselves.

chrisbrown1224

Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email chris@newvisionfinancial.com.au The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.