If you're a first-time home buyer, navigating the process of purchasing a home can be overwhelming. Here, I'll break down everything you need to know about the rescission period and how it can benefit you as a first time home buyer.
The home buyer rescission period is a critical part of the home buying process that allows buyers to back out of a purchase agreement within a certain timeframe without penalty. This period provides buyers with the opportunity to review the terms of the agreement, conduct inspections, and ensure they are making the right decision before committing to the purchase.
In this guide, I'll share the importance of the rescission period, how to effectively use this time to your advantage, and what steps you should take during this period to protect your interests as a first-time home buyer. We'll also provide tips and advice on how to make the most of this crucial time in the home buying process.
So if you're a first-time home buyer looking to understand the ins and outs of the home buyer rescission period, be sure to read until the end.
What You Should Know About the Program
This is a new initial of the government of British Columbia to help home buyers. In January 3, 2023, the B.C. government implemented the Home Buyer Rescission Period (“HBRP”) for residential real estate transactions. Also known as the “cooling-off period,” this measure will give homebuyers up to three business days to rescind an offer on a home after the offer has been accepted.
Residential Properties Eligible for the Program
Not all properties are included in the HBRP legislation. The rescission period applies to the following types of residential properties:
- A detached house;
- A semi-detached house;
- A townhouse;
- An apartment in a duplex or other multi-unit dwelling;
- A residential strata lot, as defined in Section 1(1) of the Strata Property Act;
- A manufactured home that is affixed to land; and
- A cooperative interest, as defined in Section 1 of the Real Estate Development Marketing Act, that includes a right of use or occupation of a dwelling.
Residential Properties Not Eligible
The following property types are excluded from the HBRP:
- Residential property that is located on leased land;
- A leasehold interest in residential property;
- Residential property that is sold at auction; and
- Residential property that is sold under a court order or the supervision of a court.
Important Information for Buyers
A buyer has the right to rescind a home offer within three business days after the offer is accepted, regardless of whether a real estate licensee is involved in the transaction. The three-day rescission period excludes weekends and holidays.
Only buyers can rescind a contract under the HBRP. If a buyer chooses to rescind their offer, they must:
- Notify the seller in writing before the rescission period expires; and
- Pay the seller a rescission fee. The rescission fee is 0.25% of the offer price.
What Home Sellers Should Know
The right to rescission cannot be waived by the buyer or the seller. The seller will receive a disclosure of the buyer’s right of rescission when an offer is made. The disclosure may be on a separate form, or included in the Contract of Purchase and Sale.
If a buyer chooses to rescind their offer and their brokerage is not holding the deposit, the seller is advised to seek legal advice for options on how to pursue the buyer for money owed.
Buyers do not need to provide a reason to sellers if they choose to rescind the contract.
How to Calcukate the Buyer's Rescission Amount
Where the Home Buyer Rescission Period applies, the rescission amount is 0.25% of the purchase price for the residential real property that is set out in the contract. If there are counter offers between the parties that changes the price, then the rescission amount will need to be recalculated and amended. Effective date is after accepted offer.
The Bottom Line
Don't stress tooth much about it. The specifics of the Home Buyer Rescission Period are set out in the Property Law Act (“PLA”) and the Home Buyer Rescission Period (“HBRP”) Regulation. Your realtor wilk be able to guide you through.
If you would want further clarification on the subject or have any specific real estate question of concern, please text me directly on 672.998.2220 or better still you can Schedule A One on One with me and I'll be glad to help out!
Talk again soon...:)
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