B.C. Real Estate Association raises concern on proposed 'cooling-off' period for homebuyers

The British Columbia Real Estate Association (BCREA) has raised concern about a proposed plan to impose a mandatory “cooling-off” period for resale properties and newly built homes.

In Nov. 2021, the B.C. government introduced legislation requiring a cooling-off period for all residential real estate sales to enhance consumer protection and promote confidence in B.C.’s real estate market. According to BCREA, a cooling-off period gives buyers the right to withdraw from a purchase agreement within a specified period after an offer is accepted.

In its released statement, BCREA said that while it generally supports measures to increase consumer protection in residential real estate transactions, a mandatory cooling-off period “will not take the edge off the market’s heated conditions.”

“It won’t stand the test of changing market conditions, regional market differences and doesn’t equally serve buyers and sellers,” BCREA CEO Darlene Hyde.” It also does nothing to address the root of B.C.’s housing affordability problem, namely, lack of supply.”

BCREA also noted that the proposed plan would not work based on a survey conducted in Dec. 2021. The survey revealed that 93 percent of B.C.’s realtors believed that mandating a cooling-off period would be “ineffective” at balancing risks to housing affordability and real estate practices. They said it could increase the number of frivolous offers and create an imbalance between buyers and sellers.

With this, BCREA recommended that the government adopt a “pre-offer” period of five business days from when a property is listed for sale instead of a cooling-off period. During the pre-offer period, buyers can access documents and disclosures related to the property and arrange for a home inspection before making an offer.

In addition, BCREA asked the government to work alongside stakeholders in the real estate industry to establish a process that could balance transparency for buyers with privacy concerns and raise the qualification standards for new real estate licensees to ensure skilled and qualified professionals support consumers.

“With access to extensive data and expert analysis on housing market conditions, on-the-ground insights into consumer experience, close working relationships with other housing sector stakeholders, and a commitment to enhancing consumer confidence in the realtor profession, BCREA is uniquely positioned to support the government in identifying a better way home for all British Columbians,” Hyde said.