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Understanding The Cooling-Off Period

By Eva Judge

Republish: EasyPublish™ Published: 14Dec2010 Word count: 433 Viewed: 485 time(s) Get Free Content For Your Site

If you're going to buy or sell property, it helps to familiarize yourself with the basics of the conveyancing process. One of the most important parts of that process is the cooling-off period. During that 5-day window of time, a buyer has the opportunity to double-check all of the arrangements. If he wants, he can terminate the contract by paying a small fee.

When Does the Cooling-Off Period Occur?

There's often a lot of confusion about when the cooling-off period occurs. A skilled real estate professional will be able to walk you through the entire process. However, it helps to know that this period commences as soon as the contracts are exchanged. It continues until 5pm on the fifth business day. Make sure to be clear about when your specific cooling-off period starts and end so that there are no mistakes.

What is the Purpose of the Cooling-Off Period?

In general, this time frame is designed to give buyers one last opportunity to make sure that the property and financing that they've selected are right for them. Sometimes, in the heat of the moment, people settle on arrangements that aren't really sensible. The five-day cooling-off period allows a buyer to reflect on each detail of the transaction to ensure that he really wants to go through with it. Most people get through the cooling-off period and and continue on with their purchase.

What Happens if You Terminate the Contract During the Cooling-Off Period?

As a buyer, you always have the right to terminate your contract during the cooling-off period. This is the normal way in which a real estate transaction would proceed. If you do decide to withdraw from the deal, though, you will have to pay a penalty that equals 0.25% of the purchase price. For every $100,000, then, you would have to pay $250. Still, that's a small price to pay if you decide to withdraw for a very good reason. Just having the option is enough to reduce a lot of anxiety.

Can You Waive the Cooling-Off Period?

Sometimes, buyers elect to waive the cooling-off period altogether. This often occurs in instances where a property is being hotly pursued by several potential buyers; in order to secure the property, some buyers will waive their rights to cooling-off periods. Waiving that right is easy and can be accomplished by having a solicitor a 66W certificate. Your real estate agent or solicitor will know precisely how to handle such an arrangement, should you decide to go that route. As you can see, the cooling-off period is a practical and worthwhile part of the conveyancing process.

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