What is a "Cooling Off" period?

What does Cooling Off mean?

The cooling off is a period of time that a purchaser is granted automatically on residential property sales when a purchaser exchanges contracts with a vendor. An initial deposit of 0.25% is paid at the time of exchange. The cooling off period ends at 5 pm on the fifth business day after the day on which the contract was exchanged

If the purchaser decides to rescind in the cooling off period, the purchaser will forfeit 0.25% of the purchase price to the vendor.

What's the point of a cooling off period?

The cooling off period secures the property for the purchaser while the purchaser obtains their loan approval and undertakes any property inspections (Pest & Building or a Strata Report). The vendor cannot accept any other offers in this period. If the purchaser decides to proceed with the purchase, they pay the balance of the deposit (usually a 10% deposit) the Contract becomes unconditionally binding on both parties. If the purchaser decides not to proceed, they must inform their conveyancer or solicitor before this period expires. The purchaser's conveyancer will then provide the vendor's conveyancer with the appropriate notice. The purchaser the forfeits 0.25% to the vendor

Can you sell a residential property without a cooling off?

Yes, this is quote common. The vendor, or their real estate agent, may request a s66w Certificate from the purchaser's licensed conveyancer or solicitor. This certificate removes the cooling off period and contracts exchanged with this certificate will be immediately unconditionally binding on both the Vendor and the Purchaser