Key takeaways
- In NSW an offer isn’t binding until contracts are exchanged, so a seller can accept a higher offer right up to exchange.
- Private treaty buyers get a 5 business day cooling-off period; pulling out costs 0.25% of the price ($250 per $100,000).
- There is no cooling-off at auction, or if you exchange on auction day after the property is passed in.
- The deposit is 10% unless the seller agrees to less, such as 5%; buyers can pay 0.25% at exchange and the balance before cooling-off ends.
- Have pre-approval, a reviewed contract and inspection reports before you offer, not after.
Knowing how to make an offer on a house in NSW is mostly about timing. A strong offer comes from someone with finance ready, a reviewed contract and a clear price limit, and it is only secure once contracts are exchanged. Here’s how offers, cooling-off periods and deposits work in NSW in 2026.
Before you make an offer: know your number
Your offer price should come from three things: what you can borrow, what the home is worth, and what else the purchase will cost you.
- Borrowing power. Get pre-approval so you know your ceiling. It’s conditional, so the lender still needs to value the property and formally approve you.
- Market value. Look up recent sales of comparable homes nearby. Treat the agent’s price guide as a starting point, not a valuation.
- Total cost. Transfer duty, legal fees and inspections come on top of the price. Use the NSW transfer duty calculator to see the duty on each price you’re considering.
NSW law protects you against underquoting. If you ask what a home will sell for, the agent can’t quote below their estimated selling price in the agency agreement. Tougher rules are due to start towards the end of 2026: agents will have to include a price or price range in online ads, prepare a Statement of Information with comparable sales, and face underquoting penalties of up to $110,000 or three times their commission.
Private treaty or auction: how buying works in NSW
Sydney homes are sold either by private treaty, where you negotiate a price with the agent, or at auction. The rules on commitment and cooling-off are very different.
| Feature | Private treaty | Auction |
|---|---|---|
| When it’s binding | When contracts are exchanged | At the fall of the hammer; you sign on the spot |
| Cooling-off | 5 business days (can be waived with a 66W certificate) | None |
| Deposit | 10%, or less if agreed; 0.25% can be paid at exchange | Usually 10% on the day, unless agreed beforehand |
| Inspections and finance | Can be finished during cooling-off | Must be finished before you bid |
| Competing buyers | Seller can accept a higher offer until exchange | Open bidding; one vendor bid allowed |
How to make an offer by private treaty
Get the contract reviewed
Ask the agent for the contract of sale and send it to your solicitor or conveyancer. Only they can change the contract; the agent can’t. Our guide to clauses in a NSW house contract shows what to look for.
Arrange inspections
Book a building and pest inspection, and a strata report for a unit or townhouse. You can do this before offering or during cooling-off.
Put your offer in writing
Email the agent your offer. The NSW Government suggests written offers because they help you keep track of negotiations. Include the terms below, not just the price.
Negotiate, then exchange quickly
The agent works for the seller and must tell you if other offers come in. You can keep making offers until exchange. Once a price is agreed, have your conveyancer exchange as soon as your checks are done.
What to include in a written offer
- Your price, and that it’s subject to contract and exchange
- The deposit you’ll pay (10%, or 5% if you’re asking for a lower deposit)
- Settlement period, such as the usual six weeks, or longer if you need it
- Cooling-off: whether you want the full 5 business days, or a shorter period
- Any special conditions your conveyancer recommends
- Inclusions you’re expecting, such as appliances or window coverings
- How long the offer stays open
Conditional or unconditional: which offer is stronger?
Moneysmart describes two kinds of offer. An unconditional offer becomes a binding purchase once contracts are exchanged, with no conditions attached. A conditional offer only becomes binding if conditions are met, such as finance approval, a satisfactory valuation or a clean building report.
Sellers usually prefer fewer conditions, because every condition is a way for the sale to fall over. In NSW, the cooling-off period gives private treaty buyers a short window to finish finance and inspections after exchange, so extra conditions aren’t always needed. If you need one, such as a longer period to get formal approval, your solicitor or conveyancer has to negotiate it and write it into the contract before exchange.
The strongest offer is usually one where the work is already done: pre-approval in place, the contract reviewed, the inspection report read. It lets you offer fewer conditions without taking on more risk.
Found a home you want to offer on?
Talk to Phillip before you put your offer in writing. We’ll confirm your finance position and how much room you have to negotiate.
Cooling-off rights and the 0.25% forfeit
When you buy residential property in NSW by private treaty, you get a 5 business day cooling-off period after exchange. It starts as soon as you exchange and ends at 5pm on the fifth business day after the day of exchange. If you exchange at 10am on a Tuesday, it ends at 5pm on the following Tuesday.
You can cancel during cooling-off by giving written notice, but you forfeit 0.25% of the purchase price to the seller. Off-the-plan contracts have a longer, 10 business day cooling-off period.
Example: cooling-off on a $1.2 million house
On a hypothetical $1,200,000 purchase, 0.25% is $3,000. A buyer who exchanges with a $3,000 deposit and then pulls out during cooling-off loses that $3,000. A buyer who stays in pays the balance of the deposit before cooling-off ends: $117,000 for a 10% deposit, or $57,000 for a 5% deposit.
You and the seller can agree to shorten or extend cooling-off, or you can waive it completely with a section 66W certificate signed by your solicitor or conveyancer, who must explain what you’re giving up. Sellers sometimes ask for a waiver in return for accepting your offer. Only agree once your loan is formally approved and your inspections are back.
Deposits: 10%, 5% or a deposit bond
The deposit in a NSW contract is 10% of the price unless a lesser sum, such as 5%, is agreed. Because most private sales exchange with a cooling-off period, buyers can pay 0.25% at exchange and the rest (usually 9.75%) before cooling-off ends.
A lower deposit helps if your savings are also covering transfer duty and costs, and it matters for buyers using the 5% Deposit Scheme. Some sellers accept a deposit bond, a guarantee that stands in for the cash deposit until settlement. Ask for a reduced deposit in your written offer; for an auction, agree it before the auction starts.
Buying at auction: pre-auction offers, bidding and passed-in homes
To bid at a NSW auction you register with the agent and show proof of identity, then receive a bidder number. If you’re the highest bidder when the hammer falls, you sign the contract and pay the deposit on the spot, with no cooling-off. The auctioneer can make one vendor bid on the seller’s behalf, and must announce it.
- Pre-auction offers. If the seller will consider them, you negotiate through the agent as in a private sale. The seller may ask you to waive cooling-off with a 66W certificate before cancelling the auction.
- Passed in. If bidding doesn’t reach the reserve, the highest bidder generally gets the first chance to negotiate. A contract exchanged that same day still has no cooling-off period.
- Finance first. Confirm your borrowing limit, including duty, and have your contract review and inspection reports done before auction day.
What happens after your offer is accepted
An accepted offer is a handshake, not a purchase. Tell your lender straight away so they can value the property and move from pre-approval to formal approval. Your conveyancer then arranges exchange, and you pay the deposit as agreed.
After exchange, settlement usually takes place around six weeks later, although you can negotiate a different period. Your conveyancer arranges your transfer duty and any first home buyer exemption, and settles electronically with your lender and the seller. On the morning of settlement, inspect the home to check it’s in the same condition as when you exchanged.
Negotiation tips that keep you safe
- Set your walk-away price before you start, and write it down.
- Offer below your limit so you have room to move, but keep it grounded in comparable sales.
- When price is tight, offer terms that suit the seller, such as a flexible settlement date or a quick exchange.
- Don’t be rushed: agents can’t use high pressure tactics, such as demanding an offer by the end of the day.
- Keep your finance stable until settlement, and tell your lender as soon as your offer is accepted.
For the full buying process from budget to settlement, read our guide to buying a house in Sydney, or see how we work as your Sydney mortgage broker.
Frequently asked questions
No. A verbal or written offer, and even an accepted one, isn’t legally binding in NSW until signed contracts are exchanged. Until then the seller can take other offers and you can walk away. That’s also why gazumping, where another buyer offers more before exchange, can happen. Moving quickly to exchange, with your homework done, reduces the risk.
If you rescind a private treaty contract during the 5 business day cooling-off period, you forfeit 0.25% of the purchase price to the seller. That’s $250 for every $100,000, so $3,000 on a $1.2 million purchase. You must give written notice before 5pm on the fifth business day after exchange.
Yes, if the seller is willing to consider pre-auction offers. You make the offer through the agent and it is negotiated like a private sale. Sellers often want certainty before cancelling an auction, so they may ask you to waive the cooling-off period with a section 66W certificate from your solicitor or conveyancer. Only agree once your finance and inspections are done.
An agent may ask for a small payment to show your offer is serious. It doesn’t secure the property and the seller can take several. It is refundable, and the agent must tell you in writing that neither side is obliged to proceed. If someone else buys the property, your deposit must be refunded within 14 days.
Yes, if the seller agrees. The standard deposit on exchange is 10% of the price, but a lesser sum such as 5% can be negotiated, and some sellers accept a deposit bond instead of cash. At auction, a reduced deposit or deposit bond must be agreed before the auction.
Sources
- NSW Government: Making an offer on a property (opens in a new tab)
- NSW Government: Contracts and deposits when buying property (cooling-off) (opens in a new tab)
- NSW Government: Buying property at an auction (opens in a new tab)
- NSW Government: Steps to selling a property (deposits and cooling-off) (opens in a new tab)
- NSW Fair Trading: Changes to property and stock agents laws (2026) (opens in a new tab)
- Moneysmart: Buying a house (opens in a new tab)
This article is general information only and doesn't take your objectives, financial situation or needs into account. Figures and eligibility rules change; check the official sources above or talk to us before you act. Keystone Home Loans Pty Ltd ATF BEMA Family Trust, Credit Representative Number 564704 is authorised under Australian Credit Licence Number 384704.
Written by
Phillip Bui
Founder and Principal Mortgage Broker at Keystone Home Loans, based in Arncliffe, NSW. Accredited Mortgage Broker and Full Member of the Mortgage & Finance Association of Australia (MFAA).
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