In 2016, the B.C. provincial government of the day, responding to numerous ethical violations in the real estate industry, created the Office of the Superintendent of Real Estate. In 2017, the Superintendent banned dual agency in the province.
Many jurisdictions across Canada and the U.S. watched with great interest to see if this would solve many of the ills in our industry and pundits expected other provinces to follow suit. The fact is, no one has followed the B.C. regulator’s lead. One of the several reasons why: B.C. has seen a 40-per-cent increase in unrepresented buyers since banning dual agency. Instead of being a customer of a competent and professional agent, buyers act for themselves in the most complex transaction imaginable. Is that really in the customers’ best interest?
Now the B.C. government, with the goal of slowing escalating real estate prices, is proposing legislation for a cooling off period (possibly seven days?)* for all resale transactions. This rule, according to the BCFSA, has worked well in the condo pre-sale market, where buyers line up for a new condo opening to buy condos years before they will be completed and ready for move in. Having a seven-day cancellation period doesn’t have a negative impact on the condo developer who still has two or three years to resell the odd condo sale that doesn’t go through.
But for the family who is selling their home in one city because they have already bought in another one, there is uncertainty when accepting the “best offer” and having to wait seven days to find out if they have to go back onto the market. If so, they’ll have to scramble to attract the same attention as when their first home hit the market and convince the second buyer that the first one who backed away didn’t do it for a good reason. This will suddenly and unfairly add a major unknown to an already stressful situation.
A seven-day cooling off period for all real estate transactions will not slow the price increases in B.C. real estate, but it will add a great deal of uncertainty and unnecessary stress to the selling process.
*Note: The headline and copy for this story has been changed because the length of the proposed cooling off period has yet to be determined.