Home Buyer Rescission Period Calculator
Decisions like buying a house are among the most significant of life's choices. But sometimes, they can be mistakes; people may discover they need more time before becoming homeowners or have other priorities that need consideration before purchasing a property. That is where Home Buyer Rescission periods come into play and help alleviate some significant headaches in advance.
What is the Home Buyer Rescission Period?
After the seller accepts your offer, you can withdraw from your purchase contract. However, this could lead to legal repercussions and a severe financial penalty if done without an agreed-upon rescission period.
On January 1, 2023, British Columbia implemented its Homebuyer Bill of Rights ("HBRP"). Previously known as either the "cooling off period" or "Homebuyer protection period," HBRP became effective for all homebuyers within that province.
Why is HBRP essential?
In many transactions, various events can happen before signing the purchase agreement, where you may not proceed with the completion of the property. Here are some examples:
- You could lose your job and be unable to pay your loan
- You may need to relocate elsewhere due to a job transfer; thus, purchasing a downtown townhouse becomes inadvisable
- In certain circumstances, however, one might need to temporarily move in with their parents due to an emergency in the family.
- You have found a mortgage lender who can offer you an even better deal.
- After discussing the details with your spouse, it has been decided that waiting another year before purchasing a home will be best.
So now what?
You have found another mortgage lender offering you an even better deal!
What time period do you have to resign?
In general, you have three business days to cancel your agreement, which may vary depending on the specifics. Business days refer only to Monday through Friday and do not include holidays such as Canada Day, Family Day or Christmas Day.
What Properties Are Affected by HBRP
The HBRP can apply to many sectors of real estate, including:
Apartments in multi-unit homes of at least two units
Semi-detached and detached homes
Manufactured houses that are attached to land
Residential strata lots
What is the cost of canceling?
Unfortunately, you must pay a fee to cancel your offer. With the Homebuyers' Rights Program (HBRP), you must pay 0.25 percent of the purchase price if your townhouse costs $800,000. Thus, if it costs $800,000, then you would spend $2,000 for each resigned offer.
If a deposit was held in trust, brokerages must pay the rescission fees to the seller upon cancellation. Any balance owing will then be returned to you. For example, if you deposit $5,000 for a $800,000.00 townhouse using the Homebuyer's Right of Restitution program (HBRP), $2,000 of it will be released to the seller and $3,000 returned to you.
How should you notify the seller?
A formal rescind notice must be sent to the seller via registered mail, email with a read receipt or fax.
Notices must include:
Your rescission notice data
Sign your name and signature
Name of the seller
Property address / description and parcel identifier number.
What exemptions exist from HBRP?
Here is a list of current exemptions:
Any sale made pursuant to a court order and court supervision
Property purchased at auction
Land leased for residential real estate
Assignment of contract sales
Pre-construction multi-unit developments properties are exempt from this requirement since they have a seven-day rescission period.
What Are Realtor's Obligations to Tell You?
The Real Estate Board of Greater Vancouver requires your realtor to present you with an offer. This document outlines the duration of the rescission period, whether it can be waived, associated fees and charges, deposit handling procedures and any exceptions from homebuyer protection periods.
What else should you know about the HBRP
Our government is still finalizing details surrounding HBRP. As it's a new concept, there may be some adjustments as buyers navigate their rescission periods.
Send a message to Kim Lee - Vancouver realtor, if you have any queries regarding the HBRP and other programs like the incentive. She would be delighted to assist you on your home-buying journey and demonstrate how we can be of service.
Vancouver realtor - Kim Lee
400-1286 Homer St, Vancouver, BC V6B 2Y5