B.C. realtors: New housing market regulations not enough
Posted March 28, 2022 7:47 pm.
A proposed cooling-off period for homebuyers in B.C. has good intentions, but may not have the desired outcome, according to realtors in this province.
The B.C. government is tabling legislation for what it calls a “homebuyer protection period.” It’s meant to ease pressure and give buyers more time to do things like inspections and financing, as well as nix offers after the fact. However, details of this have yet to be revealed.
Daniel John, chair of the Real Estate Board of Greater Vancouver, worries this move could result in buyers making bad-faith offers, unfairly tying up homes. He thinks holding off offers for five days would work better.
“Instead of a cooling-off period, we’re recommending that there be a pre-offer period or a cooling-up period,” he said.
It would serve the same purpose, he says, without the potential challenges of homes being tied up by deals that can be turfed.
“[That would be] easier for everyone to get in, do their due diligence, and then just take the offers after that five business day cooling up or pre-offer period,” he explained, adding he believes this would help buyers decide if the offer would be in their best interests.
Realtor Steve Saretsky wants to see a requirement to disclose how many offers a property has to better counsel buyers.
“I think just bringing some transparency to the market, documenting how many offers there are, really is the best thing for the consumer. I think that the seven-day rescission period is well-intentioned, but poor policy.”
He adds the market is changing.
“We’re seeing mortgage rates going up. That’s pulling a lot of the demand out of the housing market. I think we are going into a changing market and I think this policy’s probably coming out at the wrong time.”
Both John and Saretsky are concerned this policy won’t impact the market and top dollar will still rule.
Finance Minister Selina Robinson says the period giving buyers time to back out of an agreement will allow them to properly assess, finance and inspect the home they want to buy. The exact length of the cooling-off period has yet to be determined.
John also says buying a house is a two-way transaction and the policy may negatively impact the seller.
“If you are selling your house, would you like to be in limbo if it sold or not? And then now we have to wait another seven days. If you’ve ever sold your house lately, it’s a very stressful experience. So realtors are there to guide you through the process. But you just have to be aware there’s there’s two sides to this transaction,” John explained.
Many in Metro Vancouver have reported anything but a cooldown in recent years, primarily due to low supply issues. In the Fraser Valley, the benchmark price of a detached home hit $1.7 million last month, and in Metro Vancouver, buyers were seeing an average price of $2 million.
Robinson says she hopes the new policy will ease the some of the burden for prospective homebuyers and although details are yet to be released, she believes the plan will be effective.