B.C. becomes first province to require 3-day cooling-off period for homebuyers
British Columbia has become the first province to require buyers to have a three-day deferral period after they have signed a home purchase agreement.
The government says the new homebuyer protection period is designed to give buyers more time to make financial arrangements or inspect a home after a deal has been accepted – details omitted in markets. former hot housing market, the government said in a statement.
The extra days will also give buyers more time to consider whether buying a home is right for them, amid high selling pressure or when interest rates soar.
Tsur Somerville, a professor at the University of British Columbia’s Sauder School of Business, said the change, which went into effect on Tuesday, is targeting concerns that are not a problem in the current cooler market.
The BC Real Estate Association reported 4,512 home sales in November, down more than 50% year-over-year. The median house price in BC in December 2021 was $984,000, compared with $904,000 in November 2022.
Somerville said sellers no longer have dozens of buyers willing to waive protections like home inspections to push their bids to the forefront, the way they did when the plan was announced in 2021. .
He said adopting safeguards is important in the near term as the market heats up, but the situation needs to be monitored to avoid potential power imbalances that could be detrimental to sellers.
“We’re going back to a time when the market was a seller’s market. These things happen in cycles,” he said.
“So I think it’s important to be available, but I think it’s important to monitor it and see what’s going on.”
Trevor Koot, CEO of the BC Real Estate Association, said the new rules are not a necessity when they are announced in 2021 and will have no impact on the existing market.
“Every transaction now comes with conditions, inspections and home appraisals, and we are moving back to a balanced market where buyers can reasonably and reasonably participate,” he said.
Even in a hot market, he added, a three-day wait time isn’t enough to make a difference, as it takes longer than that to access in-home testing and support. other aid.
In 2021, the association made 34 recommendations to the government, including a five-day mandatory listing period for properties to deter bullying offers.
“Instead of giving the buyer three days later, this gives every party interested in the property, including the seller, five days to be fair and reasonable,” says Koot.
“And it has given the gift of time to everyone, not just one party.”
The province says buyers who withdraw a sale within three days will have to pay a cancellation fee of $250 for every $100,000 of the home’s purchase price, to ensure the transactions are taken seriously.
In a statement, Finance Minister Katrine Conroy said the measures would protect buyers and strengthen public confidence in the property market.