Buyer cooling-off rules to change

Buyer cooling-off rules for residential real estate are set to change in Victoria come March 1.

On that date a buyer will no longer lose their right to a cooling-off period because they sought and obtained advice from a lawyer before signing a contract, according to a statement from the Real Estate Institute of Victoria (REIV).

As the rules currently stand, the REIV continued, a buyer loses their right to a cooling-off period if they seek advice from a lawyer before signing, while someone who consults a conveyancer with the same purpose in mind does not.

However, the impact this rule change may have on the Victorian real estate industry is negligible, according to hockingstuart principal, Scott McElroy.

“These changes won’t make a huge difference I believe,” he told Real Estate Business.

“The majority of sales people will try to ensure a buyer is in a position that they don’t need a cooling off period anyway.”

Mr McElroy, who is a director at the hockingstuart offices in Carlton, Brunswick and Northcote, said at the moment only a very small percentage of buyers use the cooling-off period.

“We’d have a handful of contracts per year that cool off because most buyers these days are savvy and are well researched by the time they get to the contract signing stage,” he said.

“The days of buyer remorse are gone, you don’t get people walking in off the street on a Saturday who fall in love with a place and buy it there and then only to find by Sunday they regret their decision. It just doesn’t happen.”

Some things have not changed, however. A buyer must still exercise their right to cool off within three clear business days of signing a contract.

If the cooling off period applies, then the seller will still be entitled to keep $100 - or 0.2 per cent - of the contract price, whichever is more, as compensation for losing their sale. Normally, the money will be deducted from the deposit paid to the selling agent.

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