A rescinding notice by a homebuyer enables the purchaser to back out of a sale after the contract has been signed. If the buyer wants to renounce the contract, the buyer’s agent must provide written notice to the listing agent within three business days. It is essential to give this notice as soon as possible if the buyer is planning to obtain a mortgage refinance loan or a home equity line of credit (HELOC).
A rescinding notice must be addressed to the entity that was designated to receive the notice, typically the entity whose address is stated in the disclosure statement. The rescission notice must be in writing and is effective upon deposit in the United States mail. It need not be in any particular form, but it must clearly state the intent of the purchaser to renounce the transaction. It must also indicate the terms under which the rescinding notice must be delivered.
A valid rescinding notice must be served on the vendor during the cooling off period. If the rescission notice is delivered after 5 pm on the fifth business day, the rescinding notice is ineffective and has no legal effect. As long as the notice is properly served on the vendor, a purchaser may renounce a purchase within seven days after purchasing the property. There are some exceptions to this rule.
