- Queensland: You have five business days from the day both seller and buyer sign the contract. If this falls on a weekend or public holiday, the five-day period starts the next day. The cooling-off period ends at 5 pm on the final business day. The seller may deduct a financial penalty of 0.25 per cent of the purchase price from your deposit if you opt out.
- New South Wales: You have five business days starting from the exchange of contract through to 5 pm on the fifth day. You will have to forfeit 0.25 per cent of the purchase price to the seller to cancel the contract.
- Victoria: You have three business days starting from when the buyer signs the sale contract. You will be required to pay 0.2 per cent of the purchase price to the seller to back out.
- South Australia: You have two business days to change your mind and the notice must be given by the close of the second business day. Any purchase deposit paid over the value of $100 must be refunded in full. You will have to forfeit a holding deposit if you left one.
- Australian Capital Territory: The rules here are the same as for New South Wales.
- Northern Territory: You have four business days from the exchange of contracts when both buyer and seller have signed. You can change your mind without penalty, and both purchase and holding deposits will be refunded.
- Tasmania: There is no cooling off-period on real estate contracts for sale.
- Western Australia: There is no mandatory cooling-off periods unless the buyer and seller have one inserted into the contract.
Are you looking at buying in the near future? Below are a few pieces of information that might be helpful for buyers.
Expression of Interest vs Contract
An Expression of Interest is not a legal document. A contract will be binding upon acceptance from the seller.
Deposit on contract
When filling out a contract, the deposit you put in is not the deposit required by the bank. It is the amount to secure the property. Basically, it shows the seller that you’re committed to the purchase and if you do find a cheaper house that you like better, you won’t “walk” out on their property. Different agents will have different deposits, there is no set amount, some will ask for $10,000, others $25,000. For a rule of thumb work on 2-5% of the purchase price.
Conveyancers or Lawyers
Once your contract is accepted, you will need a Conveyancer or Lawyer to handle the legal transaction involved in the changing of the title, searches for easements and encumbrances. The Conveyancer will need to be qualified to practice in the state (QLD, NSW, SA, VIC, etc) that you are purchasing in.
If you are planning to bid at an auction, once the hammer comes down, the house is yours – cash unconditional. You need to have all your building and pest checks (if you want them) and finance for the particular house approved from your lender. Obviously you won’t bring along cash to an auction, but you will need to provide a bank cheque, personal check, or deposit bond to the percentage of the final sale price. In Queensland, it is illegal to give a price indication on an auction property.
Cooling off period
Once you enter into a contract, except at an auction, you may be entitled to a cooling off period, in which it is legal to change your mind on the purchase. Each Australian state and territory legislates a different cooling-off period and financial penalty associated with cancelling a residential sale. Contract cancellations need to be made in writing and within the specified period of time, either in person, by email or by fax.
Depending on how much deposit for the property you have, you may or may not be required to take out Mortgage Insurance. This insurance basically covers you if you were to default on the loan. Learn more here.
Obviously you really want to speak to a professional when it comes to a mortgage, however here is a quick mortgage calculator you can use as a guide.
Building and Pest Inspections
A building and pest inspection is recommended for any buyer to conduct, generally after the contract is signed. You will have a period, usually around 7 days, to consult with the solicitors any issues with the property that might be flagged.
For more detailed information on what to expect from a building and pest inspection and your rights in regards to the results, please click here.
Do your research! Spend time online checking recent sold prices, if a property has sold recently and is exact cooker cutter to what you’re looking at, but it doesn’t have a deck, do the maths and add what it could cost for the installation of a deck. The same goes for new bathroom, new kitchens. There are other things that putting a price tag on is hard to do – established manicured gardens, electrical work, plumbing, building repairs, a quality paint job – things that take time and are sometimes overlooked – a lot of this is general maintenance and must be done, but sometimes it can be done to a better quality than others.
AND DON’T GIVE UP! You may not get the first house you look at, but don’t worry there are plenty of other fish in the sea, you might just land a beauty.
Buying in Geebung? Find out about this suburb here Geebung Real Estate
Download your Free Harcourts Buyers Guide
First home buyers in QLD looking into the concession or the grant – here is the best quantifying website I’ve found. Click here to understand how the concession is calculated, and here to use the simple online estimator.
Want to know what school catchment you’d be in, click here.
References: www.domain.com.au; Government of Queensland;