| How cooling off periods work

A cooling off period starts on the day you sign the contract and is usually five business days from this date.

NOTE: There are different regulations in different states. Please be sure to do your state specific research.

What is a Cooling Off Period?

A cooling off period is exactly that. Time for a buyer make sure they want to go ahead. If you change your mind about buying a property during this cooling off period, you can cancel the contact.

Although as a buyer you can decide to pull out, it will cost you to do so. You will be charged a percentage of sale price approx. 0.25% of the total sales price. For example if the property sells for $1m the penalty will be around $2,500.

This penalty is paid to the seller to compensate for their losses.

Cooling off periods only apply to a private settlement (or private treaty) when buying a house, not through an auction.

What Steps are Involved

1 – You must receive a copy of the unsigned contract at least one business day before the agreement is signed from the agent responsible for the sale.

2 At the same time, they must provide you with the relevant state consumer guide regarding agreements.

3 As the client (you) must sign the waiver form approved by the Office of Fair Trading before signing the agreement.

As a general rule for house purchases you get a 5 business day cooling off period

This starts the day you received a copy of the signed contract and ends at 5PM 5 business days later. This does not include weekends or public holidays. As proof when the cooling off period starts, you should ask for a time/dated receipt of delivery of the contract.

During the cooling off period, get your conveyancer to do check and reports to ensure there are no problems.

You only have the option to terminate or cancel the agreement during this cooling off period.

If you decide to back out of the contract after the end of the

cooling-off period – It is likely to be very expensive with a lot of headaches.

This is something you will need good legal advice for.

Rescinding the Agreement

If you decided to rescind the agreement. You must do this with in the cooling off period. You will need to write a letter/notice of termination to the real estate agent that you are cancelling the contract.

As this letter must be rendered before the end of the cooling off period (not after as you will then be bound by the contract) – It is advised that you require a receipt of delivery from the agent, so there can be no discrepancies regarding the timing.

Disclaimer:  Although all care is taken.  We do not give any warranty whatsoever to the accuracy of any content.
This is not meant to be financial or professional advice and is only of general nature.  You must seek professional advice before taking any actions. The above information comes with no warranties whatsoever.  We take no responsibility for any actions you may or may not take. All content is of general nature only and is NOT to be taken as advice whatsoever

Gino Sotto

Residential Sales Agent
Raine & Horne Parramatta

P: 0426 228 014
E: gino@rhparramatta.com.au
W: raineandhorne.com.au/parramatta


Gino’s professional attitude and friendly nature was a breath of fresh air.  Thank you for your support and professionalism throughout the sale of our property.  Appreciate the extraordinary lengths you went to to achieve an outstanding result!
Jeanne Appleton, Northmead. NSW

Excellent communication and great confidence when negotiating with buyers. Gino focussed his attention on achieving a sale price well above our expectations. Well done Gino and your selling team.
Ralph and Maryanne Pasero, Rydalmere NSW

I found the sales team at Raine and Horne Parramatta a pleasure to deal with. Their expertise and continuous updates in selling our home was outstanding. Great work Gino!
Rochelle and Casba Webb , Parramatta NSW

A genuine performance-based selling agent Gino Sotto helped us achieve a quick sale, which saved us a lot of time and money. We would not hesitate recommending Gino & his sales team to others.
Lawrence and Kim Davies . North Rocks NSW

We were delighted with Gino Sotto and the sales price achieved for our house and the specialist approach to selling residential real estate in our area.
Danny and Manal Ayoub Merrylands NSW