The recent change in the law by the State Government to prevent an auctioneer taking a bid after the fall of the hammer highlights the fact that when you sign the contact of sale for a home bought at auction the sale is final. However this is not the case when buying a home at a private sale.
If you buy a residence by private sale, you are allowed to change your mind and cancel your purchase within three business days of signing a contract. This is known "cooling off".
Business days do not include weekends or public holidays. If, for example, you sign a contract on a Friday, you can cancel it up to and including the following Wednesday.
You "cool off" by giving notice to the seller or, more usually, to the seller’s estate agent.
Your notice can be a simple letter, addressed to the estate agent, advising you are exercising your right to "cool off" and asking that your deposit be returned.
It is best to deliver your letter to the estate agent’s office during normal business hours.
You should make a note of the date and time you deliver your letter. If you hand it to anyone other than the person who sold you the property, ask for their name and tell them what your letter is and to whom they need to give it.
If you "cool off", the seller is allowed to retain $100 or 0.2% of the price named in your contract, whichever is the greater, as compensation for losing the sale. The estate agent will deduct the amount, when returning your deposit.
