The BC Home Buyer Rescission Period comes into effect January 3, 2023.
This legislation was first discussed during the height of the 2021 market to offer some protection for buyers who felt pressured to make unconditional offers to compete in a highly competitive market. Click here to review the most common conditions (subjects) included in an offer to purchase.
There will be no option to waive the rescission period, but it won’t be as significant in a balanced market where conditional offers are the norm.
The home buyer rescission period will be similar to the seven-day rescission period that exists when purchasing new builds from developers, with two major differences:
- The home buyer rescission period is only three business days.
- There is a financial penalty for buyers who rescind their offer under the three-day rescission period.
Three days is not typically enough time to confirm financing or insurance, so this three-day period will mainly influence the opportunity for buyers to get a home inspection done even when going unconditional.
The financial penalty for rescission will be 0.25% of the purchase price paid by the buyer directly to the seller—so on a $1,000,000 home, the penalty will be $2,500. This penalty is meant to prevent buyers from tying up multiple properties under contract and then using the three-day rescission period to pick the one that best suits them and back out of the rest, which would have negative consequences for the sellers, as well as other buyers.
However:
While this three-day rescission period will be a non-negotiable part of every residential real estate sale going forward, if buyers have conditions written into their offer (which is the norm in a balanced market), the three-day rescission period is more or less irrelevant. Buyers face no financial penalty for backing out of an offer due to their included conditions (business as usual).
When we do experience another intensely competitive market, it will be interesting to see how the home buyer rescission period plays out when unconditional offers are being made.
We are always happy to answer your questions and have a conversation about your goals. Call or text Alex at 1-250-634-2141, or email [email protected].
Thank you for being here,
Alex Hughes* and Ricki-Lee Jewell, Victoria, BC Real Estate Agents
*Personal Real Estate Corporation
