HOW THE NEW HOME BUYER RESCISSION PERIOD EFFECTS SELLERS
The HBRP provides buyers an opportunity to rescind their contract to purchase certain residential properties up to three business days after an offer is accepted with a financial penalty. This rescission period applies to residential real property transactions regardless of whether a real estate licensee is involved in the transaction and cannot be waived by the buyer or the seller.
There are two things sellers need to be aware of:
- The 3 day rescission period is 3 business days, and it does not begin until the next business day after there is an accepted offer and all signatures are in place. So if you reach an agreement on Tuesday the three day rescission period would start 12:01am on Wednesday and end midnight on Friday. Say you reach an agreement on Friday and the following Monday is a long weekend - then the rescission period wouldn't begin until 12:01am Tuesday and end midnight on Thursday.
- It is up to the seller to collect the 0.25% penalty from the buyer. It is not up to your agent or brokerage to get the funds from the buyer or the buyers agent if the buyer rescinds. However, if there is a deposit in place with your agent's brokerage - one large enough to cover the cost of the penalty - then that money can be paid directly to the seller from the brokerage. That is why it is a good practice to make sure in any offer you accept that there is at least a portion of the deposit paid upon acceptance. And that upfront portion needs to be a minimum of .25% of the purchase price to ensure you get paid if the buyer rescinds.
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