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Help! Can A Seller Pull Out Of A House Sale Before Settlement In Queensland?

Disclaimer: This article provides general information explaining complex legal concepts. Please contact Butler McDermott Lawyers for personalised legal advice. 

What happens if a seller pulls out of a house sale before settlement? The Sunshine Coast has a booming property market and there is always another buyer waiting to make an offer. But once contracts are signed and all conditions are met, both the seller and buyer need to follow through with the obligations imposed on them because of the terms in the contract they signed up to. Contracts are a legal document and there can be serious implications for failing to fulfil your obligations. So, what can you do if you want to back out? 

Can a seller pull out of a house sale? 

First, let’s look at the timeline of selling a house in the Sunshine Coast:  

  1. Offers and counteroffers are made. 
  2. Seller accepts and contracts are negotiated and drafted. 
  3. Contracts are signed. 
  4. Conditions relating to a cooling-off period, pest inspections, and finance are satisfied.  
  5. The Contract goes unconditional. 
  6. The Contract settles. 
  7. The buyer is registered as the new owner of the property. 

Before the contracts are signed, either party can back out and stop the process. You may want to pull out of negotiations if you don’t think you’ll get the price you are looking for. However, once the contracts are signed and the parties become legally bound to it, backing out of the sale can become much more complicated for you.  

Once the cooling-off period ends and inspections and conditions are met, the contract goes unconditional. At this point, you are obligated to sell the property. 

Once the sale goes unconditional, there are only two ways you can pull out of the sale: 

  • There may be reasons and contingencies outlined in the contract that can allow the seller to cancel the contract.  
  • The buyer is in breach of the contract and fails to comply with certain conditions of the contract. 

Generally, you cannot back out of a sale unless the contract’s terms allow it, so check with your lawyer. When there are no options for you in the contract, you can ask the buyer if they will agree to cancel the sale – but this is very rare. 

What is the real estate cooling-off period?

In most Sunshine Coast contracts of sale, the standard cooling-off period is 5 business days from the date the contract of sale is signed by both the seller and the buyer. When this period ends, the buyer will need to follow through with inspections and other conditions of the contract. As the seller, you will need to prepare to transfer the property and vacate the premises before settlement.  

If the buyer decides to pull out of the sale in the cooling-off period, they must notify your agent before 5pm on the 5th day. You must then return the deposit, but you may withhold 0.25% of the property sale price. 

When selling a home in the Sunshine Coast, the cooling-off period can be shortened or even waived if the parties agree.  

A property sold by auction does not have a cooling-off period. 

If you pull out of the sales contract in the cooling-off period, are you still liable for damages?

The cooling-off period is a protection for the buyer, not the seller. Once the seller signs the contract, they must follow through with the contract.  This means you are still liable for damages even if you pull out during the cooling-off period.  

Just remember, your buyer can still pull out during the cooling-off period, especially if any concerns arise with the inspections in relation to the house. 

What are the usual damages for changing your mind about selling your home to a specific buyer? 

There are two avenues for legal remedy that your buyer will most likely seek if you no longer want to sell your property: 

  • They may take you to court for monetary compensation. This is called damages. You will likely have to pay for any losses the buyer suffers due to the sale falling through. This includes their legal fees, inspection fees, appraisal fees and even storage or a place to stay while they are looking for a new place to live. 
  • They may take you to court to compel you to complete the sale. This is called specific performance. This will force you to continue with the contract and sell the property, even if you don’t want to. 

Even if your buyer does not take you to court, you will still have to return any payments, including interest.  

Your real estate agent may also seek damages as they receive commission on any house sales. 

What will your lawyer advise?

The advice your property lawyer gives will depend on your individual circumstances. There may be factors that allow you to back out of the sale where it won’t be possible to follow through. Your lawyer may help find any defenses, such as vague terms or obligations in your contract, or circumstances where the buyer has acted in bad faith. They may also help look into your contract to see whether there are any terms that allow you to back out of the sale.  

Backing out of a sale might be more trouble than it’s worth. Talking to a lawyer ensures you know your options and rights regarding your property which is subject to the competitive Sunshine Coast property market. 

Real estate property disputes can cost you more if they are not handled properly. The law surrounding contracts and property is complex and the average conveyancer from a conveyancing company can’t offer you valuable property law advice. It is vital that you talk to an experienced property law firm. Contact Butler McDermott Lawyers today. 

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Simone Faunt


Peter Boyce


Peter has been practising as a Nambour Solicitor since 1977 and joined Butler McDermott Lawyers the same year.

With over 40 years practicing as a Sunshine Coast lawyer, Peter has extensive knowledge of various facets of law.

He has practised in all areas of litigation and has special interests in:

  • Criminal law
  • Civil and Commercial litigation
  • Retirement Village matters
  • Sports law
  • Resumption of land and compensation claims


Peter has specialised knowledge of and experience with resumption matters as a result of the Traveston Dam project, road corridors, Main Roads and water pipeline. He is renowned for his professional approach and is an experienced and determined advocate.

Brent King


Brent works as a litigation lawyer, providing litigation legal advice in relation to both civil and criminal law matters, including:
  • Defamation Claims
  • Contract and Debt Disputes
  • Building and Construction Disputes
  • Planning Matters
  • Criminal Law and Traffic Legal Matters
Having grown up on the Sunshine Coast and joining Butler McDermott after the completion of his studies, Brent appreciates the needs of our clients, and brings a particularly commercial approach to litigation. Brent is a member of the Queensland Law Society and the Sunshine Coast Law Association, and has litigated a wide variety of matters in the Magistrates, District and Supreme Courts.

Al Upton


After arriving at Butler McDermott Lawyers in 2016, Al quickly progressed to running our Wills and Estates section and has successfully litigated disputes in the Supreme and District Courts of Queensland in the early stages of his career.

In the years that followed Al has now moved to assist our clients with commercial and property matters having achieved positive outcomes in that area as well as general litigation. Al’s experience has him uniquely placed to provide quality advice in the areas of property, commercial, wills and estates and general litigation.

Al is involved in giving back to the community, sitting on the board for the Daniel Morcombe Foundation and Sundale Community Foundation. He otherwise became a director of Butler McDermott Lawyers in November 2021.