Everyone makes mistakes and sometimes prospective property buyers make an offer on a property and then change their minds.
There could be numerous reasons for a change of heart which causes buyers to revoke an offer on a property. Maybe the buyers have found another property they prefer. Maybe they’ve realised that their offer was too high or more than they could afford. Or maybe their circumstances have suddenly changed and they no longer wish to make an offer on a property for personal reasons.
Whatever the reasons for a buyer wishing to revoke an offer on a property, it’s important to know where you stand legally when you make an offer and if the offer can be revoked or not.
So what are the three main ways you can revoke an offer on a property?
Revoke your offer in writing fast
Under contract law you do not have a legally binding contract until the offer is accepted by the seller. That means that the buyer can revoke their offer at any time prior to the contract being signed by the seller.
To do this correctly you need to make sure that you revoke your offer in writing to the agent and confirm that your offer has been revoked before making an offer on another property.
You are not obliged to give any reason for revoking your offer.
Include a time-based clause in the contract
If you know you will want to revoke an offer once a certain amount of time has passed you can include a clause in your contract. For example the contract may state that your offer is only valid for 24, 48 or 72 hours. That way, after the specified period of time has passed, your offer is naturally revoked without you having to doing anything.
Use the cooling off period
In Queensland all buyers of residential property have a five day cooling-off period after making an offer on a property. The cooling-off period ends at 5pm on day five of the cooling-off period or, for contracts that arrive at the weekend or on a public holiday, the five day cooling-off period starts on the next business day.
Once the cooling-off period has passed the buyer must follow through on the contract and buy the property according to the terms of the contract.
If you wish to revoke your offer and cancel the sale contract you must give written notice by 5pm on the fifth day and deliver it in person, by email or fax. Be aware that if you do choose to revoke your offer during the cooling-off period the seller may charge you a penalty fee of up to 0.25% of the purchase price from any deposit paid.
So if you’ve made an offer on a property and wish to revoke it that may be possible and we will try to make sure that it happens without any penalties to you. But every circumstance is different and if you’d like to revoke an offer it’s essential to get sound legal advice before hand as mistakes made when buying property can be expensive.
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