Cooling-off period recommended to address B.C.’s hot real estate market

Would-be homebuyers in B.C. could be one step closer to having more protections during the purchase process.

The province previously tasked a group with looking into the matter, with the goal of coming up with ways to improve the process amid a hot real estate market.

The BC Financial Services Authority is now back with its report, outlining various recommendations to help people buy a home. Some of the more central recommendations include a three-day, non-waivable “cooling off” period after offers are made, a fee for cancelled offers, and a mandatory five days on the market before any offers can be made.

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BCFSA CEO Blair Morrison says the authority is also recommending the standardization of financing, legal advice, and home inspections — things that are often waved during offers.

“You’re going to see adjustments, if I can call it [that], in the real estate transaction that you’re seeing now and in the forms that will bring this into fruition. So, once the effective date of the Homebuyer Protection Period comes into place, it’s in place. The contracts need to comply with that,” he told CityNews.

Morrison also suggests B.C. consider making the bidding process here more transparent.

“There is disclosure of bids, but there’s also negotiation of the contracts. So it’s a little bit more open and ultimately gets to the right answer, which is an agreement between the seller and a buyer,” he added.

The group is also suggesting making disclosure of other offers to discourage frivolous offers mandatory, as well as making property disclosures — like strata documents — necessary ahead of offers.

“The bottom line is that it will be, once it’s put into force with all the necessary factors, it will be part of the transaction,” said Morrison.

BCFSA is pleased to announce that it has delivered its report, Enhancing Consumer Protection in B.C.’s Real Estate Market, to the Minister of Finance. Learn more and read the report: https://t.co/gNHYSbQ4kc

— BC Financial Services Authority (@BCFSAOfficial) May 26, 2022

The report, titled Enhancing Consumer Protection in B.C.’s Real Estate Market, has been delivered to B.C. Finance Minister Selina Robinson.

The BCFSA says its advice was put together after members consulted the industry, as well as “a wide range of participants.”

The review included conversations with more than 140 industry experts, including organizations, and consumer and public interest organizations.

“People looking for a home need to be protected as they make one of the biggest financial decisions of their lives,” said Robinson, who added the province will be reviewing the BCFSA’s advice.

More details on next steps are expected at a later date.