Buying a pre-sale home is different than buying a resale home. Buyers need to know about the rescission period that is part of the buying process for pre-sale homes.
MLA Canada recently posted their own blog on Buying a Pre-Sale Home & Rescission Periods and we wanted to share our 3 key takeaways for our readers.
What is a Rescission Period?
A rescission period is a seven day period where a buyer secures a pre-sale home under contract and takes the time to do their due diligence before finalizing the purchase. The buyer reserves the right to cancel the purchase within the seven day period.
Essentially, the rescission period allows buyers to check over the details of their purchase. They make sure everything looks good and no big ticket issues remain.
Takeaway 1 – Homebuyers should get financing pre-approval before purchasing a home during the rescission period.
Similar to when you buy a resale home, getting your financing pre-approved before your purchase is an important step. This is highly recommended for buyer and should be done during the rescission period. Once they purchase the home, they should also get a mortgage approval and rate hold.
Takeaway 2 – Ask questions in detail during the rescission period about the property.
During the rescission period, buyers need to take time to go over all the documents and information related to the property. This is their chance to learn all the details and answer any remaining questions about the property.
This could be anything from strata fee information, reading over bylaws and rules, or checking parking and storage details. Anything that is important to the buyer should be looked into at this stage.
It is a good idea to reconfirm the dates of construction from starting to completion at this point as well.
Ask your realtor and the relevant sales team for any questions regarding the property. They will be able to help you decipher all the information and documents.
Takeaway 3 – Buyers must cancel the contract in writing within the 7 day period if necessary.
If a buyer needs to cancel the contract for whatever reason, they must cancel the contract in writing within the seven day period. The rescission period lasts for seven days and notice must be given in this time.
Work with a licensed realtor to buy a pre-sale home
Working with professionals like a licensed realtor helps significantly when buying a pre-sale home. Realtors have the expertise and knowledge to guide you through the process of buying a pre-sale home. They negotiate your offer with the sales team and developer. They are especially helpful in navigating all the information and documents that come along with your future home. Make sure to choose a realtor that is a good fit for you, to help the process run smooth from start to finish.