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Cooling Off Periods State By State

<img src="https://cdn.sanity.io/images/3023m6wi/production/ed0a88e459d2f91c480ce08f76d26464434ae560-1200x723.jpg?rect=0,24,1200,675&w=1200&h=675&fit=crop&auto=format" alt="Cooling Off Periods State By State" />

Cooling Off Periods State By State

Each state has slightly different laws when it comes to the legal processes of selling a property. One of the differences between state laws is varying lengths in cooling off periods.

A cooling off period is an allocated period of time that begins once the contract of sale is signed, and ends once it has expired. During the cooling off period the buyer is able to contemplate the terms of purchasing the property and change their mind.

They might decide to cancel the transaction, amend the contract or even terminate the agreement.

If a buyer decides to walk away for the agreement within the cooling off period, a forfeit fee may ensue that is generally equivalent to 0.2% - 0.25% of the original asking price. On a sale upwards of $500,000, this can add up to be thousands of dollars.

This comes out of the deposit. If the sale is terminated, the seller must also return the deposit within 14 days, with the penalty already deducted.

There are 2 primary factors influencing the cooling off period: the method used to conduct the property sale and the state in which the property was sold.

If the property was sold at auction, there is no cooling-off period, the sale is locked in right there and then at auction. If you are buying or selling a property by other means however, then the varying cooling-off periods are a factor that need to be taken into your consideration.

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Here are the cooling off period requirements state by state:

Australian Capital Territory:

The ACT has a cooling off period of 5 business days and a forfeit fee of 0.25% of the original asking price.

Queensland & New South Wales:

New South Wales and Queensland are in line with each other. They both have the same specifications as the ACT, i.e. a cooling off period of 5 days and a forfeit fee of 0.25% of the original asking price. However, in NSW and QLD a buyer and seller are also entitled to waive, shorten, or extend the cooling off period via written agreement.

Victoria:

In Victoria buyers are entitled to a mandatory cooling off period of 3 business days, with a forefeet fee of 0.20% of the original purchasing price.

Western Australia:

In Western Australia there is no mandatory cooling off period, however buyers and sellers are entitled to add in a clause into the contract that specifies a cooling off period agreement concisely defined and included in the contract of sale.

South Australia:

In South Australia, the cooling off period is 2 business days. The start date begins on the day that the buyer receives the Form 1- unless it was received prior to the contract being established, in which case the cooling off period begins when the contract is exchanged. Instead of a forfeit fee, South Australian law dictates that the cooling off period is only available to buyers, vendors are locked into the contract once they sign it. Instead of a forfeit fee, a fee of up to $100 is taken out of the deposit.

Tasmania:

Tasmania does not recognise any cooling-off periods. Once the contract is signed by both parties, they are both locked in.

Northern Territory:

In the Northern Territory, buyers are entitled to a cooling off period of 4 days. There is no forfeit fee, and the duration of the cooling off period can be altered, or waived as outlined in the agreement.

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It’s always better for you to be absolutely certain before finalizing your purchase so you don’t have to use your cooling-off period.