What is a private treaty sale?
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Cooling off rules are NSW specific. Lender timeframes vary.
This guide covers how private treaty compares with auction, how the cooling off period works and when it does not apply, and whether five business days is enough to get finance across the line.
The short version: Private treaty accepts conditional offers and carries a 5 business day cooling off period in NSW. Withdrawing inside it costs 0.25% of the purchase price. Waiving it with a 66W certificate lifts that exposure to 10%. Deposits run 0.25% at exchange with the balance to 10% after cooling off ends, and settlement is around 42 days.
What is a private treaty sale?
A private treaty sale is a property sale at an advertised asking price, negotiated between buyer and seller through the agent. Private treaty is the most common method in Australia, and it allows conditional offers and a cooling off period, unlike an auction.
The seller lists at a price, buyers make offers through the agent, and the two sides negotiate until they agree or walk away. There is no deadline and no audience. Most residential property in Australia sells this way, and it is the method most first home buyers meet first.
The difference that matters is what a buyer is allowed to attach to an offer. Private treaty accepts conditions, and it carries the statutory cooling off period. Both of those exist to give a buyer room to check things after the handshake rather than before it.
Auction vs private treaty: what is the difference?
Auction and private treaty differ on timing, conditions and protection. An auction sells unconditionally at the fall of the hammer with no cooling off. Private treaty runs to no deadline, accepts conditional offers, and carries a statutory cooling off period in NSW.
| Auction | Private treaty | |
|---|---|---|
| Price guidance | Guide plus an undisclosed reserve | Advertised asking price |
| Offer conditions | Unconditional only | Conditions can be attached |
| Cooling off | None | 5 business days in NSW |
| Deposit | 10% on the day | 0.25% at exchange, balance to 10% |
| Timing | Fixed auction date | No deadline |
| If finance falls short | You still have to settle | Cooling off provides an exit |
Cooling off rules are NSW specific and vary between states.
The row that decides most outcomes is the last one. At auction the contract is unconditional the moment the hammer falls, so a low bank valuation or a finance problem is the buyer's to solve. Under private treaty the cooling off period provides a way out, at a cost.
Auction campaigns also run to a fixed date, which compresses inspections, contract review and finance into the weeks before. Private treaty spreads the same work across a timeline the buyer controls. Off the plan is a third method again, with its own settlement horizon.
How does the private treaty process work?
A private treaty purchase runs from pre-approval and property search, through inspections and a written offer, to negotiation and acceptance. Contracts then exchange, the cooling off period runs, and settlement follows around 42 days later in NSW.
The sequence is consistent. Pre-approval sets the budget and signals to agents that the buyer is real. Property search follows, commonly 1 to 3 months. Inspections come next, with a combined building and pest report at $400 to $800 and a conveyancer reviewing the contract of sale before anything is signed.
An offer goes to the agent, usually in writing, and negotiation runs in days rather than weeks. Once a price is agreed, contracts exchange within a few days. From search to keys is commonly 3 to 6 months. Our first home buyers journey guide covers the full sequence and our settlement guide covers the closing stages.
What is the cooling off period in NSW?
The NSW cooling off period is five business days from exchange, set by the Conveyancing Act 1919. A buyer who withdraws inside it forfeits 0.25% of the purchase price. Cooling off does not apply to auction purchases or where a 66W certificate is given.
Cooling off is statutory, not negotiated. It sits in the Conveyancing Act 1919 (NSW), where section 66S limits it to residential property and section 66W provides the waiver. Five business days run from exchange, and a buyer who withdraws inside the window gives written notice before 5pm on the final day and forfeits 0.25% of the purchase price. The balance of the deposit is refunded.
It does not always apply. There is no cooling off where the property is bought at auction, where the contract is made on the same day the property was offered at auction and passed in, where the purchase happens by exercising an option, or on rural land above 2.5 hectares. The pass-in case catches people, because the negotiation that follows a failed auction feels like private treaty and is not treated as such on the day.
What a 66W certificate costs you: a section 66W certificate is signed by the buyer's solicitor or conveyancer, not the buyer, and removes cooling off entirely. The contract becomes binding immediately and the withdrawal penalty moves from 0.25% of the purchase price to 10%. On an $800,000 purchase that is the difference between $2,000 and $80,000.
Is five business days enough to get finance approved?
Five business days is a tight window for formal approval. The lender must order and receive a bank valuation and clear any outstanding conditions inside it. Pre-approval shortens the work but does not remove the valuation, which is where most delay sits.
This is where the cooling off period is oversold. It is often described as the window to sort out finance, and in NSW it frequently is the only window, because a separate finance condition is less common here than in other states. But five business days has to carry the whole distance from conditional to formal approval.
Inside it the lender orders a bank valuation, waits for the valuer to get access to the property, receives the report, and then clears anything else outstanding on the file. A desktop or kerbside valuation can land in a day. A full inspection can take up to seven working days on its own, which is longer than the cooling off period.
Pre-approval removes most of the assessment work but not the valuation, and a fully assessed pre-approval is a different thing from a system generated one. Where the timing looks tight, the cooling off period can be extended by agreement, which is a conversation to have at exchange rather than on day four.
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What deposit do you pay and when?
A private treaty purchase in NSW commonly involves 0.25% of the purchase price at exchange, with the balance to 10% payable once cooling off ends. The 0.25% matches the forfeiture amount, which is why the structure exists.
The two-stage structure is deliberate. Paying 0.25% at exchange matches exactly what a buyer forfeits by withdrawing during cooling off, so nothing beyond the penalty is tied up while the checks run. The balance to a full 10% falls due once the cooling off period ends and the contract is unconditional.
Deposit bonds are accepted by some sellers as a substitute for cash at exchange, which helps where funds are committed elsewhere. The deposit sits in the agent's trust account until settlement and forms part of the purchase price rather than an additional cost. Our deposit options guide covers how the rest of the deposit gets assembled.
What happens at exchange and settlement?
Exchange is when signed contracts are swapped and the agreement becomes binding, subject to cooling off. Settlement follows around 42 days later in NSW, when the balance is paid, title transfers, and the keys are handed over.
Exchange is the moment the deal becomes real. Both parties sign identical contracts, the agent or the solicitors swap them, the initial deposit is paid, and the cooling off clock starts. Before that point either side can walk away for nothing.
Between exchange and settlement the loan moves to formal approval, the conveyancer runs title searches and calculates adjustments for rates and levies, and building insurance is arranged, which most lenders require before funds are released. A pre-settlement inspection confirms the property is in the condition contracted for. At settlement, around 42 days later in NSW, the balance is paid, title transfers and the keys change hands.
Frequently asked questions
Is there a cooling off period at auction?
No. A property bought at auction sells unconditionally at the fall of the hammer, with no cooling off anywhere in Australia. In NSW the exclusion also covers a contract made on the same day the property was offered at auction and passed in.
How long does a private treaty purchase take?
Property search commonly takes 1 to 3 months. Negotiation runs days rather than weeks, exchange follows within a few days of acceptance, cooling off is five business days, and settlement is around 42 days from exchange. Search to keys is commonly 3 to 6 months.
What is a section 66W certificate?
A section 66W certificate is a waiver signed by the buyer's solicitor or conveyancer under the Conveyancing Act 1919, not by the buyer. It removes the cooling off period, makes the contract binding immediately, and lifts the withdrawal penalty from 0.25% to 10% of the purchase price.
Can you make an offer subject to finance in NSW?
Yes, though NSW practice more often relies on the cooling off period instead. A finance condition can make an offer less competitive where other buyers are exchanging without one. The trade-off sits between certainty on finance and the strength of the offer.
What happens if you withdraw during the cooling off period?
The buyer gives written notice before 5pm on the final day and forfeits 0.25% of the purchase price. The balance of any deposit paid is refunded. Money already spent on inspections, conveyancing and reports is not recovered.
Can the cooling off period be extended?
Yes. The five business days can be shortened or extended by agreement between buyer and seller, recorded in writing through the contract or between the parties' legal representatives. An extension is commonly requested where finance or an inspection needs more time.
Can you negotiate the settlement period?
Yes. Around 42 days is standard in NSW but shorter or longer periods can be agreed. Settlement timing is one of the terms a buyer can move on, and flexibility on it sometimes carries weight where a seller has a specific date in mind.
What deposit do you pay in a private treaty sale?
Commonly 0.25% of the purchase price at exchange, with the balance to 10% payable once the cooling off period ends. The deposit is held in the agent's trust account until settlement, and deposit bonds are accepted by some sellers.
Take the next step
Private treaty gives a buyer time that an auction does not, but the cooling off window is short and the finance work inside it is real. Getting fully assessed rather than system generated matters more here than usual, our LVR guide covers the thresholds a valuation can move you across, and the Australian Government 5% Deposit Scheme and its price caps apply to private treaty purchases the same as any other. Model the numbers with our property deposit calculator and mortgage repayment calculator.
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Related resources for first home buyers
Buying at auction | Off the plan | Settlement guide | Bank valuations | Pre-approval | Deposit options | First home buyers journey
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This article is general information only and does not take your personal circumstances into account. Cooling off rights, contract terms, deposit arrangements and lender timeframes vary between states, sellers and lenders and change over time. Cooling off provisions described here are specific to New South Wales and are set by the Conveyancing Act 1919 (NSW). Figures were verified in July 2026 against current NSW conveyancing guidance on cooling off periods and section 66W certificates. Confirm your position with a licensed conveyancer, solicitor, broker or lender before relying on it. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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