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Real Estate Buyer's Guide
Cooling Off
As a purchaser, you are entitled to a three day ‘cooling off’ period. This allows you to withdraw from a purchase; this period extends for three business days from the date you, as purchaser, sign the Contract. To exercise your right to withdraw from the contract of sale, you must notify the vendor, or the vendor’s agent, in writing. If you decide to terminate the Contract via the cooling off rule, you are entitled to a refund of the money you have paid less $100.00 or 0.2% of the purchase price – whichever is greater.
Deposit
Purchasers are required to pay a deposit, which is generally 10% of the purchase price. It is important to note the due date of the deposit money – if the full amount of the deposit is not duly paid by the due date, the vendor is permitted to impose penalty interest on the unpaid amount at a (current) rate of 13% pa for each day the balance of the deposit remains unpaid.
Subject to Finance
Even if you have a pre-approval of a loan, it is prudent to include a finance approval condition in the purchase Contract. Pre-approval of a loan is always given ‘subject to a valuation of the property’ and, if the property is undervalued, you will not get your loan, and you are bound by the purchase Contract – unless it is subject to finance approval.
If your purchase Contract is subject to a finance approval provision, you have paid the deposit and have your loan declined, you can have the purchase Contract rescinded, and any money you have paid under the Contract will be refunded.
Loan Approval Date
The ‘loan approval date’, which is set out in the purchase Contract is another date that requires attention. In order to comply with the purchase Contract, you must make immediate application to the lending institution stipulated in the Contract. If you don’t have formal approval of your loan by the loan approval date, you need to contact your Conveyancer so that they can request an extension of time from the vendor.
