Can a buyer pull out after exchange?
Updated: Feb 11
Except in the case of auction sales, NSW legislation allows buyers the opportunity to cool off up until 5pm on the 5th business day after contracts have been exchanged.
There does not need to be any particular reason to cool off. It could simply be due to a change of mind.
If exercised, the buyer must give the seller written notice and in which case they will forfeit to the seller 1/4 of 1% of the purchase price (e.g. $1,250 on a sale worth $500,000).
Note that: the cooling off period can be waived if the parties agree upon the insertion of a section 66W certificate as a part of the sale contract. Whether a buyer can or will agree to this often depends upon a number of factors.