Rescission Period
Also known as: Cooling-Off Period, Right of Rescission, Cancellation Period
A limited window of time after signing a contract during which you can cancel without penalty. Most new construction purchase agreements do not include one unless required by state law.
Detailed Explanation
A rescission period gives the buyer a set number of days to reconsider and cancel the contract without losing their deposit. It is designed to protect consumers from high-pressure sales tactics.
While rescission periods exist for certain types of contracts (timeshares, door-to-door sales, certain mortgage refinances), they are uncommon in new construction purchase agreements.
Some states require cooling-off periods for real estate transactions conducted in certain settings (like model home sales offices), but these protections vary widely.
In Your Contract
Look for language about "right of rescission," "cooling-off period," or "cancellation period" near the signature page or in the cancellation provisions of your contract.
Key Points
- 1Most builder contracts do not include a rescission period.
- 2Federal law provides a three-day rescission right for some mortgage refinances, but not for purchase agreements.
- 3Some states require cooling-off periods for certain types of sales.
- 4If your contract has a rescission period, use it to get an attorney review.
- 5To cancel during a rescission period, you typically need to provide written notice.
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