When it comes to buying your own property, it is important that you make the time to undertake the necessary tasks, tests and inspections to be sure that the property that you’re buying is right for you.
It can be an extremely daunting process, and quite often the pressure of making important real estate decisions can impact your buying choices.
Because of the serious manner of real estate purchases, most Australian States and Territories allow for a cooling-off period after a sale is completed so that the purchaser can be certain that the purchase is perfect for them.
The rules for the cooling-off period varies between States, so it is important to know where you stand and what specific rules apply to your individual purchase circumstances.
This is how the cooling-off period works:
What is a Cooling-Off Period?
A cooling-off period is a set number of days where a purchaser is able to cancel a purchase contract. It is an opportunity to make sure that the property you have purchased is right for you, and happens only after both parties have signed a purchase contract.
Although it is seen as a positive opportunity to be sure that you are doing the right thing, cancelling your purchase during the cooling-off period can often lead to termination costs.
Does the Cooling-Off Period Apply To You?
The cooling-off period is only available during certain circumstances. This means that it is really important to understand whether or not a cooling-off period is applicable to you, and your purchase contract.
Some of the cooling-off period restrictions are, but not limited to, the following:
Properties purchased at auction are exempt from the cooling-off period.
Commercial and industrial properties are exempt from the cooling-off period.
The cooling-off period does not apply to any purchases made in Tasmania.
Victoria allows for a three-business-day cooling-off period, with the termination fee being 0.20 percent.
Laws, Regulations and Legislations surrounding the cooling-off period differ in every Australian State.
Legislations and Regulations
The cooling-off period legislations and regulations vary depending upon which Australian State you reside in, so it is imperative to have a complete understanding of the laws and legislations that apply directly to your buying situation. Your real estate agent can confirm these at time of purchase.
In Victoria, the cooling-off period is outlined in Section 31 of the Sale of Land Act and specifically grants purchasers a three-day period where they are able to terminate a purchase contract.
There are certain restrictions to the Clause, including the below, which states;
The sale must be for land other than land used primarily for commercial or industrial purposes, and land larger than 20 hectares used primarily for farming’
Making the Most of the Cooling-Off Period.
One of the best ways to make the most of your cooling-off period is to focus on the minor details of your purchase contract, including the structure and current shape of the purchase property.
This could include conducting further building and pest inspections, assessing the building structure, or confirming finance details with your lender.
It’s a great opportunity to ensure that the appropriate tests, inspections and installations have been made before fully committing to the purchase, and avoiding any mishaps in the future.
How Can a Real Estate Agent Help?
A real-estate agent is a great resource when it comes to understanding the ins and outs of the cooling-off period.
There are always risks associated with purchasing a property, including during the cooling-off period, so your agent is there to help discuss the requirements and responsibilities associated with a cooling-off period prior to your purchase being finalised.
You can find out more about Cooling-Off Periods by contacting Clark NextRE.