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By Law Purchasers have a 5 business day cooling off period after exchange of contracts. If an agent exchanged contracts today your cooling off period would commence on the next business day (Monday) and finish at 5 p.m. on the fifth business day (next Friday) that follows.
A purchaser can rescind the contract for any reason in this cooling off period, however, they would forfeit to the Vendor 0.25% of the purchase price. This is the initial minimum deposit paid at exchange. Say for a $400,000 house it would be $1,000.
It is in this cooling off period that I would obtain your Pest and Building Reports if you wanted them and make sure you had written loan approval.
In the real world, however, 5 days is not enough time for the lenders in particular and quite often the cooling off period is extended to 10 business days by mutual consent.
There is no cooling off period if the contract is explained to a purchaser by a conveyancer and the conveyancer gives what’s called a 66W Certificate to the Vendor’s conveyancer.
This being the case, contracts would not be exchanged until the purchaser had written loan approval and were happy with their pest and building reports.
There is also no cooling off period if the property is purchased at auction.
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