3-day 'cooling off' period, transparent bidding recommended to transform B.C. real estate sector
The Canadian Press - CBC NEWS • June 15, 2022
B.C. Financial Services Authority report recommends major changes to buying and selling process across B.C.
The regulator for British Columbia's real estate sector has recommended that the province adopt a so-called "cooling-off'' period of three business days to protect people buying a home, through legislation tabled this spring.A report from the B.C. Financial Services Authority released Thursday advises that sellers be required to provide reasonable access for a property inspection during the three-day homebuyer protection period, which would start the day after an offer is accepted.
It also advises that B.C. implement a "modest'' termination fee of 0.1 to 0.5 per cent of the price of a home to be paid by buyers who pull out of a deal.
The fee "strikes a balance between discouraging frivolous offers and recognizing the disruption in the selling process,'' the report said.
Additional recommendations include a five-day "pre-offer'' period after a property is listed, when a seller may not accept any offers, along with suggestions aimed at enhancing transparency in the transaction process.
For example, the report advises that key strata documents should be made available when a strata property is listed. The province could also require buyers to disclose to sellers any other active offers they've made, it suggests.
The report also recommends ending blind bidding and exploring an open bidding process used in many Scandinavian countries.
The report also recommends ending blind bidding and exploring an open bidding process used in many Scandinavian countries.
Homebuyers pressured to take 'unreasonable risks'
Blair Morrison, CEO of the B.C. Financial Services Authority, said at a news conference there would be "adjustments'' to the current real estate transaction process to bring the homebuyer protection period into force.
In developing the report, Morrison said the authority hosted 20 consultation sessions with more than 140 people from across B.C.'s real estate sector.
"We think this is core, basic, good consumer protection that should apply throughout British Columbia,'' he said.
"We want to make sure this works for the sector, for the real estate [agents], for the lawyers and other parts of that process,'' he added.
In developing the report, Morrison said the authority hosted 20 consultation sessions with more than 140 people from across B.C.'s real estate sector.
"We think this is core, basic, good consumer protection that should apply throughout British Columbia,'' he said.
"We want to make sure this works for the sector, for the real estate [agents], for the lawyers and other parts of that process,'' he added.
He said the review was not intended to address housing affordability in B.C.
The report also considers "blind bidding,'' a common practice in which sellers are not compelled to tell prospective buyers about competing offers.
That lack of transparency can "skew the perception of market fairness and potentially lead to distrust in the real estate transaction process,'' it said, pointing to concerns about inflated valuations or buyers overpaying for a home by offering a price that significantly exceeds the next highest offer.
The regulator looked at open-bidding alternatives, advising B.C. to consider options such as live auctions and anonymous disclosure of other offers.
The report also considers "blind bidding,'' a common practice in which sellers are not compelled to tell prospective buyers about competing offers.
That lack of transparency can "skew the perception of market fairness and potentially lead to distrust in the real estate transaction process,'' it said, pointing to concerns about inflated valuations or buyers overpaying for a home by offering a price that significantly exceeds the next highest offer.
The regulator looked at open-bidding alternatives, advising B.C. to consider options such as live auctions and anonymous disclosure of other offers.
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