Whether you are buying a property investment or your next home in Victoria you will find that the cooling-off rules have changed since the 1st of March.
Each state has slightly different rules that allow purchasers to “cool off” – change their minds.
In Victoria you have 3 working days to back out of a contract you signed, after that the contract goes unconditional, but in the past if you sought advice regarding the contract from a solicitor before signing it, you lost your entitlement to this cooling off period.
From 1 March, if you intend to use your lawyer to help you with your purchase you will no longer lose your right to cool off just because you sought and obtained advice from your lawyer before you signed your contract.
What about auctions?
According to the REIV from 1 March, in the majority of residential sales, the only occasion on which you will not be able to change your mind and cool off after signing your contract will be when you sign within three clear business days before, on the day of, or within three clear business days after a publicly advertised auction.
Some things have not changed.
You must still exercise your right to cool off within three clear business days of signing your contract. In counting the days, you ignore the day you signed, weekends and public holidays.
If you do cool off, the seller will still be entitled to keep $100 or 0.2 per cent of the contract price, whichever is more, as compensation for losing their sale.
Normally, the money will be deducted from the deposit you paid to the selling agent and the difference returned to you.
Remember this only applied in Victoria, the rules are different in other states.