Before You Commit: A Guide to Cooling-Off Periods

When buying a residential property, the excitement of finding “the one” can sometimes lead to quick decisions. That’s where the cooling-off period comes in—a legal safety net designed to give buyers a chance to reconsider after signing a contract.

At Equilaw, we believe informed clients make confident decisions. Here’s what you need to know about cooling-off periods.

What Is a Cooling-Off Period?

A cooling-off period is a short timeframe after signing a contract during which the buyer can cancel the purchase without major penalties. It’s designed to provide breathing space for buyers to conduct inspections, finalise financing, or simply reconsider the purchase.

How Long Is the Cooling-Off Period?

In New South Wales, the cooling-off period for a residential property purchase is 5 business days from the date of exchange.

What Happens If You Cancel?

If you choose to pull out during the cooling-off period, you will forfeit 0.25% of the purchase price to the vendor. The rest of your deposit is returned.

Can the Cooling-Off Period Be Waived or Extended?

Yes. The buyer can waive or shorten the cooling-off period by providing a 66W certificate, which must be signed by a solicitor or conveyancer.

The cooling-off period can also be extended, but only with the seller’s written agreement.

When Does a Cooling-Off Period Not Apply?

Some situations where a cooling-off period does not apply include:

• Purchasing at auction

• Contracts entered into on the same day as the auction (for passed-in properties)

• Commercial or rural properties

• When the buyer has waived the right using a 66W certificate

Why It Matters

Even though it may seem like a formality, the cooling-off period can provide valuable time to:

• Organise a building and pest inspection

• Confirm finance approval

• Get legal advice or clarify terms of the contract

Need Advice? We’re Here to Help

At Equilaw, our conveyancing team is experienced in guiding buyers through every step of the property transaction process. If you’re considering a property purchase, get in touch with us to ensure your interests are fully protected on 02 6542 5566. 

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This newsletter is intended to provide general information. You should obtain professional advice before you undertake any course of action.