Taking a Breath: What You Need to Know About Cooling-Off Periods in NSW

In the heat of the moment, especially with big decisions like buying a house or signing a contract, it's easy to get swept up in the excitement and overlook crucial details. That's where cooling-off periods come in - a safety net that allows you to step back, reassess, and make an informed decision.

What is a Cooling-Off Period?

A cooling-off period is a grace period granted to purchasers after signing a contract. During this time, you have the right to cancel the contract (with minimal fees typically limited to 0.25% of the purchase price) and walk away from the deal. It's essentially a "buyer's remorse" window, designed to protect you from impulsive decisions. It also is designed as a "get me out of here" escape for that home that is riddled with defects, illegal structures or that home unit with exorbitant strata levies.

When Do Cooling-Off Periods Apply?

Cooling-off periods in real estate come into play in various situations, most commonly with private treaty sales.

They do not apply to sales of property at the fall of the hammer at an auction or a sale on the day of an auction. Cooling off periods also no not apply to non residential properties and properties greater than 2.5 hectares in size.

You can waive the cooling off period by giving the vendor a ‘66W certificate'. It is also possible to reduce or extend the cooling-off period by written agreement with the vendor.

How Long Do Cooling-Off Periods Last?

When you buy a residential property in NSW, you have a 5-business day cooling-off period after you exchange contracts.

A longer cooling-off period applies for properties sold off the plan, because these contracts are often large and complex. A 10-business day cooling-off period applies to these contracts.

Things to Consider During the Cooling-Off Period

• Review the contract thoroughly: This is your chance to dissect the fine print and ensure you understand all the terms and conditions.
• Seek professional advice: If the contract involves a significant investment, consider consulting Chidiac Legal and financial advisor of your choice to clarify any doubts and answer any questions.
• Obtain a pre purchase building and pest inspection or strata report for strata titled properties. Don't let emotions cloud your judgment. A thorough inspection report can uncover hidden problems that may affect your decision.

Remember: Cooling-off periods are for your benefit. Use them wisely to make well-informed choices you won't regret later.

Contact us on 02 9707 3888 to find out more about cooling off periods.