Publication date: Jul 21, 2022 • 1 hour ago • 3 min read • 7 comments The BC government on Thursday announced a new period of relaxation in property sales, a measure designed to protect home buyers who are being pressured into high-risk sales. Photo by Azin Ghaffari/Postmedia Archives

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The BC government on Thursday announced a new relaxation period for property sales, a measure intended to protect homebuyers who are feeling pressured into risky sales.

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The homebuyer protection period, the first of its kind in Canada, takes effect on January 1st. It was immediately condemned by the BC Real Estate Association, which represents 24,000 real estate agents. The cooling off period will give the buyer three business days after an accepted offer to carry out due diligence, such as inspections, seeking legal advice and confirming financing. The grace period is one of seven recommendations made in May by the BC Financial Services Authority to protect consumers in BC’s real estate market. “Too many people are faced with waiving an inspection to buy a home,” BC Finance Minister Selina Robinson said Thursday. “This is an important step toward giving homebuyers the peace of mind they deserve while protecting the interests of people selling their homes — for today’s market and into the future.”

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The homebuyer protection period includes a cancellation fee of 0.25 percent of the purchase price, or $250 for every $100,000, for those who choose to back out of a deal. For example, if the buyer cancels on a $1 million home, they will have to pay $2,500 to the seller. Trevor Koot, chief executive of the property association, said the industry was extremely disappointed by the minister’s decision to implement the home buyer protection period in isolation from other measures “This runs counter to advice from the province’s real estate regulator, which — in May — recommended several consumer protections be implemented as a package, not à la carte,” he said. Coote said the government’s decision undermined the independence and expertise of the province’s real estate regulator and should concern British Columbians. He said the BC government should give the BC Financial Services Authority the power to conduct its own investigation and make its own decisions in relation to regulations.

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The province says it continues to study the advice from the authority, which oversees credit unions, mortgage brokers and insurance companies in addition to real estate. In November, the province announced plans for a seven-day cooling-off period, but the BC Real Estate Association pushed back. He said he preferred another recommendation from the financial services authority – a pre-offer period that would require the market to be listed for at least five days before any offer would be accepted. The real estate association said, ultimately, the only way to increase affordability is to increase supply. Tsur Somerville, senior fellow at the UBC Center for Urban Economics and Real Estate, said: “The home buyer protection period is a long time coming and a much needed modernization package for the way homes are bought in the UK Colombia and for the stability, responsibility and transparency of the entire market”.

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Andrey Pavlov, an economics professor at Simon Fraser University’s Beedie School of Business, said the cooling-off period is a flawed policy because it does nothing to remove obstacles to increasing housing supply, such as overcoming the very time-consuming approval process of city ​​for development and cumbersome building code. He noted that the cooling period could discourage sellers, which would further reduce the already extremely short supply of housing. Pavlov said he believes the timing is also counterproductive as the housing market is experiencing a slowdown, if not in prices, in sales due to high and rising interest rates. The Financial Services Authority has also recommended requiring sellers to provide up-front ownership disclosure forms and key strata documents as part of the listing process.

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And their advice included requiring buyers to disclose offers made on other properties, discouraging buyers from submitting multiple offers at the same time, and allowing sellers to make an informed decision if there’s a chance the buyer will walk out of the sale for reasons other than those relating to direct sale. Other proposals include requiring sellers to disclose how many and the value of offers have been received in cases of bidding wars where potential buyers are asked to revise their offers, as well as standardizing certain clauses in home purchase contracts such as financing, home inspections and legal advice. With Postmedia files. [email protected] twitter.com/gordon_hoekstra More news, less ads: Our in-depth journalism is made possible by the support of our subscribers. For just $3.50 a week, you can get unlimited, ad-lite access to The Vancouver Sun, The Province, the National Post and 13 other Canadian news sites. Support us by subscribing today: The Vancouver Sun | The Province.

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