Signing a contract to buy a home is a big commitment, and Victorian law gives most private-sale buyers a short window to reconsider. It is called the cooling-off period, and it is worth understanding exactly how it works before you sign, because the rules have some important exceptions.
In Victoria, the cooling-off period for a private sale of residential or small rural property is three clear business days. It starts from the day you sign the Contract of Sale, not the day the seller signs.
During that window you can end the contract for any reason, or no reason at all. You do not have to justify your decision.
Cooling off is not entirely free. If you withdraw during the cooling-off period, the seller is entitled to keep a penalty of $100 or 0.2 per cent of the purchase price, whichever is greater. On a $700,000 home, that penalty is $1,400.
The rest of your deposit must be refunded to you. The penalty is the price of changing your mind, and for most buyers it is far cheaper than being locked into the wrong purchase.
This is the part that catches people out. The cooling-off period does not apply in several common situations, so you should never assume you have one.
The auction exception is the most important one for Melbourne buyers. If you buy under the hammer, or you sign in the days immediately around an advertised auction, there is no cooling-off period. Once your bid is accepted, you are committed.
That is exactly why you should have your contract and Section 32 reviewed before auction day. By the time you are the highest bidder, it is too late to raise a concern.
If you do have a cooling-off period, use it. Send the Contract of Sale and Section 32 to your conveyancer or property lawyer straight away so they can review the documents while the clock is running. Three business days goes quickly, and you want any red flags identified with time to act.
At Orange Legal Group we review contracts within one to two business days, which leaves you room to make a decision inside the cooling-off window.
No. The three days are clear business days, so weekends and public holidays do not count. The day you sign is also not counted.
You must give the seller or their agent written notice before the cooling-off period ends. Your conveyancer or lawyer can prepare and serve this for you to make sure it is done properly and on time.
No. Buying at auction, or within three clear business days before or after an advertised auction, removes the cooling-off period. This is why a pre-auction contract review is essential.
Orange Legal Group offers fixed-price conveyancing and property law advice across Victoria, handled by qualified property lawyers in plain language, with no hidden fees. If you are buying, send us your Contract of Sale and Section 32 and we will review them before you sign. Your first review is free when you go on to use us for the conveyancing.
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