British Columbia Announces Consumer Protection Policy for Home Buyers in Competitive Markets

British Columbia’s upcoming three-day cooling-off period, aimed at protecting potential homebuyers, doesn’t make a big difference to markets moving from enthusiastic to balanced. Probably, says the head of the BC RealEstate Association.

“That’s not enough,” Trevor Couto said on Thursday after announcing a mandatory three-day period that would give the finance minister time to hire a home inspector and take other important steps, such as arranging funding. “.

“This policy will have no impact in 2023 and interest rates will rise in the fall,” Couto said.

“If we get to the market we just saw, this will be an effective period for doing due diligence. We don’t claim that,” he said on January 1, next year. Said in response to the plan to come into effect.

Mr. Couto said the state had largely ignored the 34 recommendations provided by the association earlier this year.

They include a five-day pre-offer period, which allows consumers to open their property to a wider market rather than having buyers and sellers react too quickly when an offer is being made. Said to provide time to compare homes.

Treasury Minister Serena Robinson said consumer protection policies provide peace of mind to those making unconditional offers by reducing the likelihood of paying thousands of dollars for repairs later because they didn’t hire a home inspection. ..

The first plan of this kind in Canada, which includes a cancellation fee of 0.25% of the purchase price, or $ 250 for every $ 100,000 for those who cancel the transaction, balances the needs of both buyers and sellers. Robinson said.

Homebuyers’ protection terms are based on discussions with the industry by the BC Financial Services Authority and the experience of buyers who later jumped into a regrettable deal, Robinson said.

“This change means that people are better protected through current and future market fluctuations.”

However, Mr. Couto said consumers need to protect through the “standard” real estate time the state is currently entering if unconditionally multiple offers may be uncommon.

Average home sales in British Columbia in June jumped from $ 737,854 in February 2020 to $ 968,529, with fierce competition pushing prices to record highs in many of the states, according to association data. As a result, it increased by about 30%.

Homebuyer Elaine Spiros, who joined Robinson at a press conference, said the finance minister, after being assured by a realtor that the “exceptional” home he wanted to buy had already been inspected and built according to the code. Said that he contacted.

“A couple who didn’t do due diligence under time pressure got a house,” she said of their purchase in 2017.

But their “very painful” experience began three weeks later when the sewers were backed up, and nine months later they suffered similar damage, she said.

They also paid tens of thousands of dollars for other repairs, Spilos said, adding that the property disclosure statement did not mention sewerage issues.

Camille Bain

Canadian press