Week in review. Not much change here, we are seeing more and more listings hit the market and reductions are happening every day.
It is Heating Up Outside and BC Government Just Announced a "Cooling Off" Period
Last Thursday, the BC Government announced regulations that will enable a mandatory three-day Homebuyer Protection Period (HPP), previously called a “cooling off period” to take effect on January 1, 2023. The HPP will allow potential buyers three days to back out of a real estate transaction. A rescission fee of 0.25% of the purchase price of the home will be paid to the seller if the buyer rescinds their offer during this period. The cooling off period that is being put in place is heavily weighted to buyers in response to the real estate market over the last year. There no doubt that protecting consumers is needed when the prices and purchases as we saw in the last year people put less thought into those decisions then they do buying a car or home TV. There is definitely a need for consumer protection, however, these factors do not appear to consider the other side of the real estate transaction (the sellers).
The cooling-off period will give a buyer three business days following an accepted offer to conduct due diligence such as inspections, seeking legal advice and confirming financing. For example, if the purchaser cancels on a $1-million home, they would be required to pay $2,500 to the seller. There are some details currently missing from the implementation of this, that I am not aware of, at the moment. However, my assumption would be any offer that did have subject conditions that were outside of that 3-day recission period would not be subject to paying the fee.
It appears that this implementation is too little too late as the real estate market has cooled itself over the last few months with the increase in interest rates. Further to that, there is mixed feelings about this from the real estate boards as the factors are all one-sided, when in reality we have to protect both sides of the consumer's needs which is buyers and sellers. Here is the Media Release from Association of Interior Realtors. Here is a link to an article from the Vancouver Sun that highlights comments from the Vancouver Real Estate Boards and a professor from Simon Fraser. As always, real estate is interesting and ever-changing on all fronts. Let me know your comments or your thoughts I would love to hear from you. Have a great week and reach out if there is anything in the world I can do for you.
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