AKA The least the government could do and still save face.

This new policy essentially protects Buyers who got in way over their head in making a really bad emotionally charged decision. Basically, for three days after an offer is written a Buyer can cancel the transaction with no reason and pay a 0.25% cancellation fee. That is $250 per $100,000 in purchase price. So a $750,000 purchase would incur a $1875 penalty. 


How will this affect you? 


As a Seller, for the first three business days you will sit on pins and needles waiting for the time to pass. This does not include the day of the acceptance, weekends or holidays, so the rescission period could technically be 5-6 days depending on when the offer was accepted by all parties.


As a Buyer you will likely be required to give an immediate deposit for the amount of the 0.25% penalty to show good faith and cover the possible rescission fee.


Where does this get tricky for everybody?


Suppose that you as the Buyer have made an offer subject to obtaining financing. Right away your mortgage broker then tells you that you cannot get the financing required. You have to cancel the contract because of the financing condition but you don't want to pay the rescission fee because you have a valid reason for cancelling.

Do you wait for the rescission period to end before advising the Seller? So far the legal advice is to wait so there is no confusion between cancelling for no reason and cancelling because a condition cannot be fulfilled.  This is bad for the seller because they have their property tied up for up to a week in a deal that is going to collapse. Hopefully there will be some better clarification on cancellation for no reason and cancelling because a condition cannot be fulfilled. 


This law was brought into play due the the last two years of unconditional offers. We will all have to have time to get accustomed to this new policy before the market goes crazy again (and it will). History does tend to repeat itself.