While most home buyers know they want the property they are purchasing, it can happen sometimes that there is a change of heart. It might be due to an unfavourable, last-minute building inspection, or just simply buyer’s remorse.
For this reason, most Australian states nominate a ‘cooling off’ period for real estate transactions, to give buyers the chance to consider whether they really want to continue with the contract once the emotion of making an offer has subsided. It also gives them the chance to carry out any building and pest inspections before the contract is final.
The provision is not available when the sale is by auction.
In NSW, Queensland and the ACT, the cooling off period is five business days after signing the contract. The Northern Territory stipulates four days, while Victoria and South Australia ask three. In WA and Tasmania, however, there is no cooling off period, unless the parties agree to have one inserted into the contract.
Potential buyers in some states such as NSW and Queensland, might forfeit 0.25% of the purchase price if they pull out during the cooling off period.
In certain circumstances the buyer might choose to shorten or waive the cooling off period, especially if they have a solicitor acting for them and have already done their searches and inspections. This waiver will need to be put in writing, with dates specified.