The BC housing market is red hot right now, which has led the government to announce a “cool off” period to keep buyers from getting burned.
These amendments to the Property Law Act are being referred to as a “home-buyer protection period” and are meant to halt no-condition purchases, which are often rampant in a market like this.
Why do we need a cool-off period?
In a hot market like the one we are experiencing right now, buyers may feel pressured to waive certain conditions they normally would require, such as home inspections, in order to get their offer accepted. This leaves a buyer unaware of any problems with a property that would ordinarily dissuade them from committing to purchase, but in this market, their options are limited.
Another issue is having time to get finances in order for the home purchase. A buyer may have found their dream home, but if they’re still waiting to hear from the bank or mortgage broker, someone else could come along and force their way to the front of the line for the house.
“Too often, buyers are feeling forced to submit no-condition offers just to have a chance in a multiple-bid situation,” said BC Finance Minister Selina Robinson at her announcement on March 28. “People need to have protection as they make one of the biggest financial decisions of their lives. A home buyer protection period is about improving consumer protection and balancing the risk in the marketplace.”
This isn’t the first time BC has experienced a hot housing market. Back in 2016, BC was in a very similar situation, and many people committed to those no-condition purchases and regretted it after they moved in.
According to Global News, industry representatives estimate that more than 70 per cent of offers in B.C.’s most competitive markets over the past year may have been made without conditions, which can lead to major repair and renovation costs, or even the loss of a deposit if the buyer’s financing falls through.
When will the cool-off period come into effect?
The Province announced back in November that the coof-off period was coming, and introduced the legislation at the end of March. It will still be a while before the cool-off comes into effect, as the Province plans to hold consultations with home inspectors, appraisers, realtors, academics and representatives from the legal and financial services sectors. The goal is for the cool-off period to start in the summer.
So if you’ve been looking to buy but feel overwhelmed by the seller’s market, relief is on the horizon.
Find a qualified realtor
If you’ve felt a little hesitant to buy a new home, consider connecting with a qualified realtor to help ease those concerns. The Mayne Brothers have 40 years of combined experience and will do a lot of the legwork involved with making your offer. This is not a market you’ll want to navigate on your own and the last thing you want is to be taken for a ride.
While the cool-off won’t solve the lack of inventory issue — which has been rampant in the Kelowna area and South Okanagan in particular — it will help buyers from getting themselves locked into a potential money pit. This is the largest purchase of most people’s lives; you don’t want to wind up with something that doesn’t fit your needs or you can’t afford to fix.
Thanks to the cool-off, your realtor will be able to find out more info about the home along with the home inspection so there are no big surprises waiting for you once you sign the paperwork.