The cooling-off period is a set window after signing a residential property contract where you can withdraw for any reason, subject to a small penalty deducted from your deposit. It exists to give buyers time to review the contract and get legal advice before it becomes binding. It never applies to properties bought at auction, in any state. The exact length of your window, the penalty amount, and how to waive or shorten it all depend on which state the property is in — find your state below.
In detail
To cool off, you must communicate your decision to the seller (or their agent) before the deadline — telling your conveyancer alone is not enough, since they then need time to pass the message on. Don't leave it until the last day. Once you cool off within the window, the seller keeps a small percentage of the deposit as a penalty and refunds the rest.
In practice
In our experience, buyers misunderstand the cooling-off period in two directions. Some treat it as a safety net they'll never need and don't use the window to get the contract reviewed; others assume it's longer or more forgiving than it is.
The things we see trip people up:
What we do is use the window for what it's designed for — reviewing the contract and giving advice — and, if a buyer decides to withdraw, make sure notice reaches the seller in time, accepting the small penalty deducted from the deposit.
The takeaway: the cooling-off period only helps if you act within it and tell the right person — don't wait until the last day.
Common questions
No, in every state — cooling-off never applies to auction purchases.
The seller/vendor keeps a penalty percentage from the deposit; the balance is refunded to you. The exact percentage depends on your state.
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