COOLING OFF TIME WHEN BUYING A HOME

Buying a new home can be a very emotive experience.  You fall in love with the place and you just have to have it but your future happiness rests on making the correct decision and there are many potential pitfalls.  Often there can be extraordinary pressure to make a decision quickly, usually all it takes is the agent to say they have someone else interested and you feel you have to make a decision on the spot or lose it.  But the wrong decision can be disastrous when you act in haste and find out you can’t get finance or there are problems with the house.  The law tries to protect purchasers in this situation by providing for a Cooling Off period, built into all Contracts for the Sale of residential properties.  The cooling off legislation gives a purchaser an option to withdraw before the expiration of 5 business days, following the date of the Contract.  In a normal situation after your offer was accepted by the Vendor, you would have time to make enquiries about the property, speak to a solicitor to check the details in the Contract, ensure there’s nothing unusual or adverse in the terms, get the property inspected by a qualified building inspector for faults, termites or other nasties and make sure you have finance approval, only then Contracts are signed and exchanged.  But in a pressure situation or perhaps it was a ‘rush of blood’ at the time and you walk out of the agent’s office having signed to buy a house you may not have intended too.  That is where the Cooling off Period comes in.  It allows time for you to rationally consider what you are doing, weigh up the options and make sure you are making the right decision.   Unfortunately a lot of agents leave a buyer to take the risk without consideration.  If you change your mind and use the cooling off provisions you’ll forfeit 0.25% of the purchase price. ($250 per hundred thousand dollars)  A small price for what might be years of misery, financial hardship or loss, from a decision made in haste.  Be careful though, the Cooling Off Period doesn’t apply in auction sales nor when purchasing rural or commercial properties.  A solicitor needs to provide a certificate to waive the Cooling Off period and usually there will be a period to make urgent enquiries in that case.  It’s a great idea to talk to Johnston Tobin Solicitors at an early stage rather than being caught out!