A question that is often asked of the REIV is about a purchaser having second thoughts after signing a contact to purchase a property. The day after the deposit has been paid the purchaser is having second thoughts. There was no auction, it was a private sale. The seller has also signed. The question is can the purchaser get out of the deal?
As the purchaser has bought a residence, the Sale of Land Act allows them to cancel the purchase within 3 business days after the signing of the contract. This is known as “cooling-off”.
When calculating the days, you ignore weekends and public holidays. For instance if you signed on a Saturday the 3 days will start on the coming Monday and end on Wednesday.
If you are in this circumstance you will need to sign a letter telling the agent you have exercised your right to “cool-off” and want your deposit returned. You will need to deliver it to his or her office. To avoid problems, make sure you deliver your letter during business hours.
When you “cool-off, the agent will return your deposit less 0.2% of the purchase price. The seller is permitted to keep the 0.2% as compensation for losing the sale.
Cooling off does not apply to properties purchased at an auction or if you have obtained legal advice.
If interested in learning more about this update please contact me today!
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