A new homebuyer protection period protects people looking to buy a home in BC from being forced into a high-risk sale.
The season is the first of its kind in Canada and marks the first key step the province is taking toward better consumer protection for homebuyers in the real estate market, according to a report by the BC Financial Services Authority (BCFSA). The mandatory three-day period gives home buyers a chance to take important steps as they prepare to make big financial decisions, such as securing financing or home inspections.
Finance Minister Selina Robinson said: “Too many people are forgoing checks to buy a home.” “This is a major step forward in providing homebuyers the peace of mind they deserve while protecting the interests of those selling their homes – for today’s market and for the future.”
The homebuyer’s waiting period will be effective from January 1, 2023. It includes a fee of 0.25% of the purchase price or $250 for those who choose to opt out of the deal. For example, if the buyer exercises their right of rescission on a $1-million home, they are required to pay the seller $2,500.
Buyers can still make offers on home inspections or financing at any time. A waiting period gives home buyers an opportunity to do their due diligence in the absence of conditions.
The results of the Home Buyer Protection Period consultation, which BCFSA completed this year, included a range of real estate industry stakeholders including home inspectors, appraisers, realtors and academics, as well as representatives from the legal and financial services sectors.
The province will continue to study the BCSA’s advice and potential impact to further strengthen public confidence in the real estate market.
Blair Morrison, general manager, BC Financial Services Authority –
“Buying and selling a home are the most significant financial transactions in many people’s lives. Measures to implement the homebuyer protection period and other consumer protection reforms are set out in BCFSA’s advice to the government to give British Columbians adequate time to exercise due diligence. Our recommendations are based on consultation with over 140 stakeholders, including industry experts and public interest organisations. We want to increase confidence in real estate transactions and our advice is aligned with this outcome. “
Jonathan Sheppard, President, Home Inspectors Association of BC –
“Home inspections can help you avoid some of the costly risks of buying while helping you make informed decisions. Members of the Home Inspectors Association of BC are proud that the BC government recognizes these risks and is once again leading the country in consumer protection.”
Andy Yan, Urban Planner and Urban Program Director, Simon Fraser University –
“The Home Buyer Protection Period is a long overdue and much needed package of reforms to how we buy homes in British Columbia and to bring stability, accountability and transparency to the entire market.
Tsur Somerville, sSenior Fellow, UBC Center for Urban Economics and Real Estate –
“Balancing the needs of buyers and sellers is important. The main goal is to level the playing field and allow buyers to not make decisions under unreasonable time pressure. Without an inspection, buyers feel trapped into buying the property. It addresses the most important goal.”
Elaine Spilos, BC Home Buyer –
“The homebuyer waiting period ensures that the homebuyer has the information they need to make a good decision.”
- BCFSA is responsible for supervising and regulating the financial services sector, including real estate professionals, mortgage brokers, insurance, pensions, trustees, credit unions and credit union deposit insurance corporations.
- BC will be the first province to implement a home buyer protection period for resale properties and new construction homes.
- Freezing periods for pre-construction sales of multi-unit development properties such as condominiums exist under the Real Estate Development and Marketing Act.
Read the report on Enhancing Consumer Protection in the BC Real Estate Market, here https://www.bcfsa.ca/media/2861/download