Updated 25 October 2026
Contract for Sales - Seller’s Most Asked Questions #22. Should I accept the first offer?
The first offer can be worth accepting when the price, conditions and buyer’s readiness suit your circumstances. Waiting does not guarantee a better result. Equally, an attractive headline price can disguise a lengthy investigation period, uncertain finance or conditions that allow the buyer to withdraw.
For NSW residential sellers, the important distinction is between agreeing on a price, exchanging contracts and reaching a position where the buyer’s cooling-off and conditional rights have ended. Christine Manolakos uses an options analogy to explain why a property described as under contract may still return to the market.
1. Compare the whole offer
Ask your agent for evidence from comparable completed sales and an explanation of current buyer interest. Assess the proposed price against that evidence, your mortgage discharge amount, selling expenses and the timing of your next move. An asking price or optimistic appraisal is not proof of what another buyer will pay.
Examine the deposit, settlement date, finance position, cooling-off period and every special condition. A buyer awaiting a lender’s valuation or the sale of their own home presents different risks from one whose funding and investigations are substantially complete. Pre-approval is not the same as unconditional finance approval.
You can counteroffer or request clearer terms before committing. Ask what investigations remain, when they will finish and whether the buyer needs contractual protection for them. A slightly higher offer may provide less certainty if it leaves important decisions unresolved for weeks.
2. Know when acceptance becomes binding
In a standard NSW residential sale, the parties usually become legally bound when signed contracts are exchanged. Verbal acceptance and an initial holding deposit ordinarily do not achieve that result. Have your solicitor check the actual documents and correspondence, especially if someone proposes an unconventional signing or electronic acceptance process.
Once exchange occurs, the seller has no statutory cooling-off right. A better offer arriving tomorrow does not itself permit the seller to cancel today’s contract. Before authorising exchange, understand the obligations you are accepting and the buyer’s remaining rights to withdraw.
3. Understand the cooling off period
The ordinary NSW residential cooling-off period ends at 5 pm on the fifth business day after the contract is made; off-the-plan contracts generally have ten business days. It begins when the contract is made. The buyer must exercise the right by serving a compliant written rescission notice within time.
Valid cooling-off rescission ordinarily costs the buyer 0.25% of the purchase price, payable to the seller, with the balance of money paid refundable. On a hypothetical $1 million purchase, that is $2,500. It is a percentage of the price, not of the deposit, and may not cover the seller’s lost marketing time or other opportunities.
The right may be waived using a valid section 66W certificate. Shortening also requires a compliant section 66W certificate. An extension should be confirmed in writing by the seller before expiry. There is no statutory cooling-off period at auction or on a same-day sale after the property passes in. The Conveyancing Act contains the detailed rules and exceptions.
4. Christine explains the comparison with a call option
Christine’s analogy is that exchanging with cooling-off can give the buyer a short decision window while securing the agreed price and binding the seller. Commercially, that resembles holding a call option over shares: the option holder has the right, but not the obligation, to buy at an agreed price within the applicable exercise period. The ASX explanation of options describes this distinction between a right and an obligation.
The legal difference matters. A call option generally requires exercise to trigger the purchase. An exchanged sale contract already binds both parties, subject to the buyer’s cooling-off right. If the buyer does nothing before expiry, the contract continues. The 0.25% cooling-off forfeiture is payable on rescission; it is not an option premium automatically earned by the seller.
An actual property call option is a separate arrangement requiring advice on its fee, duration, exercise mechanism, disclosure and duty consequences. A put-and-call arrangement may also let the seller compel a purchase. Residential options have their own statutory rules; exercising an option generally does not create a fresh cooling-off period under the resulting sale contract.
5. Investigations can change the deal after acceptance
A buyer may agree to a price before receiving the building and pest reports, reviewing council records or completing finance checks. Later inquiries may reveal structural movement, unauthorised works, restrictive easements or a lender’s valuation below the agreed price. The buyer may then seek a reduction, additional conditions or an exit.
For an apartment, the strata records may reveal unresolved water penetration, litigation, proposed major works or a special levy. A clean-looking unit does not establish that the building or owners corporation is financially sound. An investigation period should reflect how long records and professional advice will actually take.
This creates risk for both sides. The seller may lose momentum with other buyers while believing the sale is secure. The buyer may discover a serious problem after the right to withdraw has expired. Where possible, resolve significant investigations before exchange rather than relying entirely on a short cooling-off window.
6. The timing of bad news determines the options
Before exchange, the parties can generally renegotiate or stop negotiations, subject to any binding arrangement already made. During an available cooling-off period, the buyer may seek changes or validly rescind. The seller need not agree to a price reduction merely because a report is unfavourable.
After cooling-off expires or is waived, an adverse report does not automatically release the buyer. Any finance, inspection or due-diligence condition must be assessed against its precise wording, deadline, notice requirements and obligations to take reasonable steps. A request for more time does not itself extend a deadline.
For example, a hypothetical buyer receives a report about substantial waterproofing defects near the end of cooling-off. The solicitor must promptly assess whether to seek an agreed extension, negotiate or serve a valid rescission notice. Waiting for the seller’s response can allow the deadline to pass.
Separate rights may arise from disclosure failures, misrepresentation, breach or another legal ground. They require specific advice. Simply refusing to settle without an available right can expose the buyer to deposit forfeiture and further claims. Sellers should also obtain advice before treating a withdrawal notice as invalid or releasing the property for resale.
7. A real case shows why accuracy matters
In Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60, buyers purchased a Mona Vale waterfront property at auction. Subsequent inquiries challenged the brochure’s survey information about the waterfront boundary and swimming pool, undermining their intended alterations.
The High Court majority rejected the misleading-conduct claim against the agent on the particular facts, including its role in passing on information without adopting it. However, separate proceedings against the vendor resulted in repayment of the deposit. The case illustrates how inaccurate information can unravel a sale; it does not establish that disclaimers always protect agents or that buyers have no remedies.
8. Prepare for a reliable exchange
Have your solicitor prepare a compliant contract before marketing and address known issues accurately. Check the disclosure documents, title restrictions and proposed special conditions. The Registrar General’s guidance also confirms that revised cooling-off notices are compulsory for contracts and options exchanged from 1 June 2026.
Give the agent clear instructions about price negotiations, exchange authority and requests for cooling-off extensions. Agree a realistic timetable for inspections and access. Do not conceal a problem to secure a quick signature: misleading information or a disclosure failure can create a dispute after apparent acceptance.
Before accepting, ask whether the proposed price is supported, whether the buyer can proceed, and what could still stop completion. Christine and the CM Lawyers conveyancing team can review the contract and conditions alongside your agent’s market advice. Contact CM Lawyers before authorising exchange or changing an existing agreement.
Key resources
NSW Government — Contracts and deposits: exchange, cooling-off periods, withdrawal costs and key exceptions.
Conveyancing Act 1919 — Residential sale and option provisions: statutory cooling-off, rescission, forfeiture and certificate requirements, followed by the option provisions in Division 9.
NSW Registrar General — Guidance for practitioners: updated option rules and the cooling-off notice required from 1 June 2026.
ASX — Introduction to options: the rights, exercise period and premium underlying the call option comparison.
NSW Government — Inspection reports and buying a strata property: checks that can reveal building defects, ownership restrictions and financial obligations.
Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60: official judgment concerning property information and the distinct claims against the agent and vendor.
NSW Government — Steps to selling and misrepresentation guidance: seller preparation and agents’ obligations concerning misleading information and material facts.
