Is there a “cooling off” period after purchasing a home?
In today’s hot housing market, consumers may feel tempted to buy a home on impulse, thinking if they don’t act now, they will miss their opportunity to settle into their dream home.
But after you have an accepted offer and the dust settles, you might start rethinking your decision and want to cancel your purchase. People often refer to this as “buyer’s remorse.”
However, in most real estate transactions there is no cooling off period, which means you can’t change your mind.
There’s one notable exception: newly-built condominiums sold by the builder. In this case, there is a process for a buyer to cancel the contract.
You or your lawyer must provide written notice to the builder or developer, or its lawyer. They must receive it within 10 days of the day you receive the disclosure statement, or the signed Agreement of Purchase and Sale (whichever comes later). If you decide to choose this option, you should strongly consider consulting a real estate lawyer to guide you through this process.
This isn’t possible with any other type of real estate purchase. Unless you’re buying a newly-built condo or there is a written provision in the agreement that permits you to cancel it, you can’t back out without consequences.
If you and a seller come to terms for the purchase of a home and sign an Agreement of Purchase and Sale, the signed document becomes a legally binding agreement. If you arbitrarily “walk out” of the deal, you risk losing your deposit, potential legal action from the seller and legal action to recover commission from the brokerage representing you.
So if you’re an eager homebuyer, it’s important to consider some key questions before signing on the dotted line:
- Is the home within your budget?
- Does it meet your needs?
- Do you like the neighbourhood amenities?
- Will certain appliances and fixtures be included? Are some (like the water heater, furnace and alarm system) under a rental agreement that you’ll have to take over?
- Does the property need any repairs, and if so how much will they cost?
A home purchase is a costly investment, so it’s common to experience doubt during the buying process. Don’t rush in without carefully considering all of your options. A real estate sales professional can be a valuable asset. They can help you set realistic expectations before you embark on the house hunt. They can help you identify your likes and dislikes to get a home that meets your needs while staying within your budget.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.