One of the key protections available to residential property buyers is the cooling-off period. This legal safety net gives buyers time to reconsider their decision and conduct final due diligence after signing a contract.
What Is the Cooling-Off Period?
In Queensland, the cooling-off period is a five business day timeframe that starts on the business day the buyer receives a fully signed contract. Therefore if the contract is signed on a business day, the cooling off period ends at 5.00pm four business days after the contract date. During this period, the buyer can terminate the contract for any reason by providing written notice to the seller.
If you decide to withdraw, a termination penalty of 0.25% of the purchase price will be deducted from your deposit. For example, if you are buying a home for $600,000, the cost of cancelling would be $1,500.
When Does It Not Apply?
The cooling-off period does not apply to properties purchased at auction or if the buyer signs a separate waiver of rights. It is also important to note that only the buyer can terminate during this time—sellers do not have the same right.
How to Use the Cooling-Off Period Effectively
This short time frame should be used strategically. We recommend buyers:
- Engage a solicitor or conveyancer immediately to review the contract and advise on any unusual or risky clauses.
- Order building and pest inspections as soon as possible. Significant issues might justify cancelling or renegotiating.
- Confirm finance approval if your contract is subject to finance. Do not assume your loan is final until it is formally approved.
Final Thoughts
The cooling-off period exists to give buyers peace of mind, but it only helps if used proactively. If you are in this stage of your property journey, getting timely legal advice is essential.
