Yes — but whether you can do so without penalty depends on when you try to withdraw, which state you are in, and how the property was purchased. Here is what you need to know.
Your Options for Pulling Out
1. During the Cooling Off Period
In most Australian states, buyers have a cooling off period after signing contracts. You can withdraw during this time, but you will forfeit a small percentage of the purchase price as a penalty (typically 0.2% in VIC and 0.25% in NSW and QLD).
2. Subject to Finance Clause
If your contract includes a finance clause and your loan is not approved within the specified timeframe, you can withdraw without penalty. This is the most common legal exit after contracts are signed.
3. Subject to Building and Pest Inspection
If your contract includes a building and pest clause and the inspection reveals serious issues, you can withdraw or negotiate a price reduction.
4. After the Cooling Off Period
Pulling out after the cooling off period — and without a valid finance or inspection clause — is a breach of contract. You risk losing your full deposit and potentially facing legal action from the vendor.
State-by-State Summary
| State | Cooling Off Period | Finance Clause | Penalty to Exit |
|---|---|---|---|
| Victoria | 3 business days | Yes (if included) | 0.2% during cooling off |
| NSW | 5 business days | Yes (if included) | 0.25% during cooling off |
| QLD | 5 business days | Yes (if included) | 0.25% during cooling off |
| WA | None | Yes (if included) | Full deposit at risk |
How a Collings Property Advisor Can Help
Before signing contracts, a Collings Property Advisor reviews your situation, helps you understand the clauses that protect you, and advises on your negotiation position if issues arise during the cooling off or inspection period. Fixed fee: $4,500 + GST.
FAQs
Do I lose my deposit if I pull out?
During the cooling off period you forfeit the penalty percentage only. After the cooling off period and without a valid exit clause, you may lose your full deposit.
What if I change my mind after exchange?
After exchange in NSW (or after the cooling off period ends in other states), pulling out without a contractual right to do so means you are in breach. Get legal advice immediately.
Can a property advisor help me exit a contract?
A property advisor can help you understand your rights and position — but for formal legal advice on contract exits you also need a solicitor or conveyancer.
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