Are you agreeing to auction conditions at a private treaty?
Cooling off, Unconditional exchange and Section 66W
In the current race to find and buy property, we’re beginning to see a growing pressure placed on potential buyer’s to unconditionally exchange when making an offer. Unconditional exchange means that once an offer is agreed upon and contracts are exchanged, the purchase is immediately binding - think auction conditions.
If you have acquired a pre approval, are confident in the property & your ability to complete the purchase then unconditionally exchanging on a property is generally the next step.
Regardless, there’s nothing wrong with understanding your options… Typically, when purchasing a property in NSW (via private treaty) there is a 5 day cooling off period (negotiable) that is granted after the exchange of contracts. This period of time allows you to formalise your finance, complete any necessary checks on the property and consider whether you still wish to proceed.
During the cooling off period you are able to back out of the purchase at minimal cost, whereas backing out of an unconditional exchange typically costs you 10% of the purchase price as a minimum.
Finally - section 66W certificate and what you need to know about it. As mentioned, having a cooling off period is a standard part of purchasing a property in NSW via private treaty. However buyer’s do have the option of waiving the right to a cooling off by signing the section 66W certificate in the contract of sale. It’s important to note that this waives the right to back out of the purchase even if pest or building inspections return unfavourable or if you’re unable to formalise your finance.
If you're nervous about making an offer or unsure of the exact terms of sale that you're agreeing to - reach out a broker for guidance.
Disclaimer: This document has been created by Loan Market Pty Ltd (ABN 89 105 230 019, Australian Credit Licence number 390222). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter.You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs. Information included has been sourced from third parties and has not been independently verified. Accordingly, Loan Market Pty Ltd is not in any way responsible for nor provides any warranty express or implied as to its accuracy or relevance.