In Victoria, we have a three-day cooling off period for every real estate purchase. There are some exclusions to the rule where it is not applicable, but for the most part, if you have purchased your property via private treaty, expressions of interest or outside of three business days of an auction, you have the right to pull out of your contract without reason.
The three days are to be three clear business days and begin on the next business day from the date that you signed the contract. As an example, if you were to purchase a property on a Monday the 1st , the cooling off period would begin on Tuesday 2nd and conclude on Thursday 4th. If, within this time you decide to back out of a contract, you will need your legal representative to formally send a note to the vendor’s legal side expressing your interest to cool off. Also remember, it is when you signed the contract, not when the owner does, so if you signed on the Monday and the owner signed on the Friday, then the property will have already passed it’s cooling off period and if there are no further conditions, will be an unconditional offer.
There are penalties to cooling off. If have exercised your right, then you will be liable to pay the sum of .02% or one hundred dollars, whichever is sum is greater. This money goes to the owner of the property. Say for instance you purchased a property for eight hundred thousand dollars, your fee to cool off will be one thousand six hundred dollars. So, it’s not a cheap process to go around purchasing and cooling off on multiple properties.
As the cooling off has been implemented for the everyday consumer, there are some exclusions to the rule. If you have purchased your property within three business days of a publicly advertised auction, if the property is primarily used for industrial or commercial purposes and if the property is used primarily for farming and is over twenty hectares. It’s also not applicable if you and the vendor had previously signed a contract of sale for the same land in very much the same terms and if you’re an estate agent or corporate body, there’s no cooling off.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.