What do they mean?
If you’re new to the property market, sometimes ‘real estate lingo’ can feel a tad overwhelming so that’s why we have put together this comparison for you so you can keep yourself up to date with what we are talking about.
What is the Cooling Off Period?
You’ve found your dream home, you have your finance pre-approved, but still require the final sign off, you have negotiated a sale price with the vendor but want to secure the home for a period of time to allow you to complete your due diligence – then this option is perfect for you!
You and the vendor will sign a contract for the agreed purchase price, you will pay a non-refundable deposit of 0.25% of the purchase price, this will allow you 5 business days to complete your pest and building inspection, get final finance approval and have your conveyancer request any changes to the contract that may be required. It also takes the property ‘off the market’ during that time. On the 5th business day, you will be required to pay the balance of the deposit, either 5 or 10% of the purchase price, depending on what you have negotiated. Once paid, the property is now ‘sold’!
If you choose not to proceed with the sale, you will lose your original 0.25% deposit.
What is Unconditional Exchange?
This is usually done at Auction, however, some buyers and vendors may choose to do this for a Private Treaty sale.
If you choose to do an unconditional exchange, you will be required to do all of your due diligence before as once contracts are exchanged, you are unable to withdraw from the sale without a massive penalty and it is usually not advised to do so.
Once you have had all terms agreed to, finance approved, pest and building complete and you are ready to proceed, you will pay your 5 or 10% deposit and contracts will be exchanged. The property is still on the market until this takes place.
Summary:
- Cooling Off Period – gives you 5 business days to sort out your inspections, etc
- Unconditional Exchange – You are unable to withdraw from the sale without a massive penalty.
If you or someone you know has any questions in regard to the cooling off period or anything else, do not hesitate to contact our office to speak with one of our friendly team members today on 1300 224 828.
