The BC NDP government has announced new measures to regulate the real estate market which will take effect in Spring of 2022. Among them is a mandatory cooling off period which would be similar to the current policy in place for preconstruction sales whereby the Buyer of a property, after agreeing to price and terms with a Seller, can walk away from the contract with no penalties whatsoever up to seven days after agreeing to the Contract of Purchase and Sale. Currently, Buyers can decide to make an offer without a due diligence period so that their offer is firm and binding, and their deposit is non-refundable. Some Buyers choose to do this to be more competitive, and to acquire the property at a lower price. With this new legislation, Buyers would not longer have the freedom to waive this rescission period.
Central among the claims of the NDP is that Buyers should have the time to do their due diligence: after all, this could be the most important financial decision of their lifetime. This is a very reasonable request.
But is all as it seems?
In this video REALTOR Mark Wiens of Remax Crest Realty shows how buyers under the current regime almost always have the opportunity to do their due diligence in advance, rather than waiting. He then goes on to show the 6 main effects of this policy which will be:
1. Higher prices
2. More difficulty for serious Buyers to purchase property.
3. An increase in frivolous offers
4. Buyers will need to disclose personal information
5. Sellers will faced increased uncertainty and costs
6. A decrease in the number of properties underpriced to attract bidding wars.
Furthermore, Mark Wiens explores the differences regulations for the pre-constructions market and the resale market.
Mark Wiens is licensed at Remax Crest Realty. Mark's opinions are not necessarily reflective of the opinions of his brokerage or any real estate association or community which he belongs to.
