High-pressure sales, multiple offers and bidding on homes without an inspection are pushing B.C.’s urban real estate market into high-risk deals, and the province’s real estate regulator is considering a “cooling-off period” to give buyers more information and time before closing a real estate deal.
Finance Minister Selina Robinson says legislation will be coming next spring to protect buyers from making decisions without knowing enough about what they are buying, and what other offers they might be facing. B.C. already has a seven-day cooling-off period for pre-build condominium construction, to allow bidders to change their minds and walk away from deals in a market that has seen speculators bidding up prices.
The details are to be worked out by the B.C. Financial Services Authority (BCFSA), which started operation in August as the single regulator for financial services in B.C., including real estate. Robinson said a cooling-off period is coming for newly built home sales and resales, but more discussion with real estate and mortgage industries is needed to finalize that terms. Making inspections mandatory before a sale is also being considered.
Robinson said a surge in real estate demand, driven by low interest rates and a rebound after home sales were restricted by the COVID-19 pandemic restrictions, has realtors and mortgage brokers concerned they can’t adequately protect their clients. Currently the BCFSA doesn’t have access to information on multiple bids, and buyers are “blind bidding” on houses without knowing about other bids.
“People looking to buy a home need to know they are protected as they make one of the biggest financial decisions of their lives,” Robinson said Nov. 4. “With this step, we’re moving ahead to protect people and their interests in the real estate market by bringing in a cooling off period for homebuyers and looking at additional measures to ensure effective safeguards are in place.”
The ministry says a cooling-off period allows buyers a limited time to change their minds and cancel a purchase with “no or diminished legal consequences.”
Blair Morrison, B.C.’s superintendent of real estate and CEO of the BCFSA, said consultation with industry stakeholders in the coming weeks will help determine the specifics of the regulations. The authority has set up an email address for comments, firstname.lastname@example.org.