Selling a property is a major financial decision, and sometimes a seller may change their mind after signing a Contract of Sale.
But can a seller simply cancel the contract because they no longer want to sell?
Generally, no. Once a Contract of Sale has been signed and becomes binding, a seller cannot simply walk away because they have changed their mind or received a better offer.
Whether a seller can end the contract depends on the terms of the contract, the circumstances of the transaction and the rights available under Victorian law.
This article explains what sellers should know before attempting to cancel a property contract in Victoria.
When Does a Property Contract Become Binding?
In a private sale, a buyer may make an offer by signing a Contract of Sale. Once the contract is accepted and signed by the parties, it generally becomes a legally binding agreement.
Before signing, sellers should make sure they understand:
- The purchase price
- The settlement date
- The deposit
- Any special conditions
- Any conditions relating to finance or other matters
- What is included in the sale
- Any obligations they must satisfy before settlement
A seller should not assume that they can change their mind after signing.
Consumer Affairs Victoria recommends that sellers carefully consider an offer before accepting it and only accept an offer if they are satisfied with the price and willing to sell at that price.
Can a Seller Cancel Because They Changed Their Mind?
Usually, no.
For example, a seller generally cannot cancel simply because:
- They think they accepted too low a price.
- Another buyer has offered more money.
- They have changed their mind about moving.
- They have found another property they prefer.
- They no longer want to sell.
- They regret signing the contract.
Once the contract is binding, the seller may have contractual obligations to complete the sale.
Trying to sell the property to another buyer without properly ending the existing contract can create serious legal and financial consequences.
Does the Cooling-Off Period Apply to the Seller?
This is an important distinction.
For a typical private residential property sale in Victoria, the three-business-day cooling-off right belongs to the buyer, subject to the usual exceptions.
The cooling-off period starts from the day the buyer signs the contract, not the day the seller signs it.
The seller does not generally receive the same cooling-off right simply because they have changed their mind.
For example:
A seller cannot generally say, “I have changed my mind, so I will cool off.”
Cooling-off should therefore not be treated as a general cancellation right for sellers.
What If Another Buyer Offers More Money?
This is one of the situations that can cause problems.
Imagine a seller signs a contract to sell their property for $700,000.
The next day, another buyer offers $750,000.
The seller may understandably regret accepting the first offer. However, the higher offer does not automatically give the seller the right to cancel the existing contract.
The seller should not simply accept the second offer and assume the first contract can be ignored.
A higher offer does not automatically cancel an existing contract.
The seller should obtain appropriate legal or conveyancing advice before taking any action.
Can the Buyer and Seller Agree to Cancel the Contract?
Potentially, yes.
If both parties agree that they no longer want to proceed, the contract may be capable of being ended by agreement.
However, this should not be handled informally.
The parties should obtain appropriate advice about:
- How the contract will be terminated
- Whether the buyer’s deposit needs to be returned
- Whether either party has incurred costs
- Whether there are any termination fees or other consequences
- Whether another document or agreement is required
A seller should not assume that simply telling the buyer or real estate agent, “I don’t want to sell anymore,” automatically ends the contract.
What If the Buyer Has Breached the Contract?
This is different from a seller simply changing their mind.
If the buyer fails to comply with their contractual obligations, the seller may have rights or remedies under the contract.
For example, issues may arise if the buyer:
- Fails to pay the deposit
- Fails to settle on the agreed settlement date
- Does not comply with a contractual condition
- Otherwise breaches the contract
The seller’s rights will depend on the particular contract and circumstances.
A seller should obtain advice before attempting to terminate a contract or claim a breach.
The consequences of terminating incorrectly can be significant.
What If the Contract Contains a Special Condition Allowing Termination?
Some contracts contain special conditions dealing with particular circumstances.
For example, a contract may contain conditions relating to:
- Finance
- Building or other requirements
- The sale of another property
- Development or planning matters
- Other agreed conditions
Whether a seller can terminate will depend on the exact wording of the relevant condition and whether its requirements have been satisfied.
This is one reason sellers should understand the contract before signing it, rather than assuming that standard terms will cover every situation.
What Happens If the Seller Refuses to Settle?
If a seller has entered into a binding contract but later refuses to complete the transaction, the buyer may have rights against the seller.
Depending on the circumstances, this can potentially result in:
- Legal proceedings
- Claims for losses
- Disputes about the deposit
- Additional costs
- Delays
- Other contractual consequences
The exact consequences depend on the contract and the circumstances of the breach.
A seller should therefore seek professional advice before refusing to settle.
Can a Seller Sell the Property to Someone Else?
Generally, a seller should not enter into another sale of the same property while an existing binding contract remains in place.
For example:
- Seller signs a contract with Buyer A.
- Buyer B later offers a higher price.
- Seller wants to sell to Buyer B instead.
- Seller attempts to cancel the contract with Buyer A.
This can create significant legal issues.
The seller should first determine whether the original contract can lawfully be ended.
What If the Contract Has Not Yet Been Signed?
This is different.
Before a contract has been accepted and becomes binding, the parties may still be negotiating.
Consumer Affairs Victoria notes that a buyer can withdraw an offer at any time before the seller accepts it.
For sellers, this highlights an important point:
Do not treat an offer as something you can accept casually.
Once the necessary documents have been signed and the contract becomes binding, the seller’s position can change significantly.
What Should Sellers Do Before Signing?
A contract review can help sellers understand special conditions and other terms before they commit to the sale.
1. Are you happy with the purchase price?
Do not accept an offer simply because you feel pressured to make a quick decision.
2. Is the settlement date suitable?
Make sure the proposed settlement date works with your moving plans and any purchase of another property.
3. Have you disclosed the required information?
The Section 32 Statement and contract documents need to be accurate and complete. Consumer Affairs Victoria states that incorrect or insufficient information in the Section 32 Statement can potentially give a buyer rights to withdraw or take legal action.
4. Have you reviewed the special conditions?
Special conditions can have important consequences for both parties.
5. Are you genuinely ready to sell?
If you are unsure whether you want to sell, it is better to resolve that uncertainty before signing.
Can a Seller Cancel After Signing? — Quick Summary
| Situation | Can the seller simply cancel? |
|---|---|
| Seller changes their mind | Generally, no |
| Another buyer offers more money | Generally, no |
| Seller regrets the price | Generally, no |
| Seller no longer wants to move | Generally, no |
| Buyer agrees to cancel | Potentially, subject to proper agreement |
| Buyer breaches the contract | Seller may have contractual rights |
| Special condition allows termination | Possibly, depending on the wording |
| Contract has not yet become binding | Different considerations apply |
Frequently Asked Questions
Can I cancel the sale if I change my mind?
Generally, you cannot simply cancel a binding property contract because you have changed your mind.
Can I accept a higher offer after signing?
A higher offer does not automatically allow you to cancel an existing binding contract.
Does the three-day cooling-off period apply to sellers?
Generally, the Victorian cooling-off right applies to the buyer in a private residential property sale, subject to the statutory exceptions.
What if the buyer agrees to cancel?
The parties may be able to end the contract by agreement, but the terms and consequences should be properly documented and appropriate advice obtained.
What if the buyer has breached the contract?
The seller may have rights under the contract, but should obtain advice before attempting to terminate the contract or take other action.
Final Thoughts for Sellers
The safest time to decide whether you want to sell your property is before you sign the Contract of Sale.
Once a property contract becomes binding, a seller generally cannot simply walk away because they have changed their mind or received a better offer.
If you are unsure about any part of the contract, consider getting professional advice before signing.
At Prox Conveyancing, we provide professional seller conveyancing services throughout Victoria, helping sellers understand the conveyancing process and their obligations when selling property.
Need help with your Victorian property sale? Contact Prox Conveyancing for professional conveyancing assistance.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.