Many Metro Vancouver home buyers jumping in with subject-free offers

VANCOUVER (NEWS 1130) – Given how hot the real estate market is in Metro Vancouver, if you want to win a bidding war, there’s a good chance you’ll have to put in a subject-free offer.

Stephen Johnson, who recently bought a home, made five unsuccessful offers on various properties in less than two months and had planned to stick with the requirement of getting an inspection. But eventually he buckled, making a successful no-subject offer last week.

He’s not thrilled it’s come to this. In his case, there was some urgency to find a home, as his partner is expecting their first child.

“It really kind of took advantage of buyers,” he said. “If I was a seller, for example, in this market, and I have a property that I know has problems or I know has issues — this is the time to sell.”

He feels many sellers will be offered well over asking, without requiring an inspection.

“That’s really dangerous for regular people like me, who don’t have a boatload of cash — that I get a 15-minute appointment and I have to go in, no-subject for a $1.1 million property that’s 100 years old,” Johnson said.

Related article: Bidding wars are causing Lower Mainland real estate prices to rise

Johnson feels something needs to be done to “level the playing field” for buyers.

“There’s just too much leverage that the seller has right now, in my opinion,” he said.

Mortgage broker Katy Mackenzie tells us the majority (75 to 80 per cent) of offers she’s seeing are subject-free.

“Even if you have a pre-approval and you have been vetted by your broker or your lender, the property has not yet been vetted. So, the lender can decline to finance that property,” she said.

Steve Saretsky with Oakwyn Realty says given the desperation out there, there will be some buyers who run into problems.

“There’s going to be, I think, some regret and some people making mistakes. But that’s sort of the nature of the market right now,” he said.

“I’m sure we’ll hear stories down the road, where you went in subject-free — you didn’t do a lot of due diligence, you made a rush decision — and maybe there are more problems with the house down the road,” Saretsky said.

Related articles:

• How sustainable is Canada’s housing market surge?

• January home sales hit new record for the month as prices also post record high

Earlier this week, the Real Estate Board of Greater Vancouver said increased competition for homes has meant more bidding wars, pushing prices up even further — despite the pandemic.

The board said February home sales for the Metro Vancouver region were more than 40 per cent above the 10-year average, with a 26.1 per cent increase of newly listed homes. In the Fraser Valley, sales were up by 88 per cent above the 10-year average.

-With files from Mike Lloyd and Frances Yap