BC REALTORS® recommend a mandatory pre-offer period to reduce risks to property buyers and sellers in the real estate market.
When Natalie Holgerson and her husband received an unsolicited offer on their townhome in Steveston BC, they couldn’t believe their luck. In the hopes of moving into a single-family house, they decided to take a chance. Unfortunately, things haven’t panned out as they’d hoped.
Today, they’re renting after losing out on multiple properties despite making a series of subject-free offers. There was never time for due diligence or a home inspection and offers were always well over the asking price. “Unless you’re willing to take on a million-dollar-plus mortgage, which we are not at this stage in our lives, it’s a super challenging situation,” says Holgerson.
Informed decisions instead of regrets
The fact is that BC has nowhere near enough housing supply to meet demand. In March 2021, 67,000 buyers were competing for just 24,000 listings. With so much competition, it’s no surprise that multiple and subject-free offers have become the norm.
Concerned that consumers are making increasingly risky decisions, the BC government has announced plans to introduce a mandatory “cooling-off period” in real estate transactions.
A cooling-off period would let buyers back out of a signed purchase contract with little to no legal consequences — likely leaving the seller in a difficult situation, especially if they’re buyers in another transaction, which is extremely common. A solution that only protects one side involved in a transaction is no solution at all.
That’s why the professional association for BC’s 24,000 realtors, the British Columbia Real Estate Association (BCREA), has recommended that the BC government introduce a mandatory “pre-offer period” of at least five business days from when a property is listed for sale, instead of a cooling-off period.
Pre-offer period: peace of mind for sellers and buyers
Unlike a cooling-off period, which protects buyers at the expense of sellers, the BCREA’s proposed pre-offer period would give both sides of a transaction peace of mind. During the pre-offer period, a buyer has time to review documents and disclosures, ensure their financing is in place, and arrange for a home inspection.
On the other side, when the seller receives an offer, they can be confident that the buyer is serious and has the financing in place to make sure the deal goes through.
BC REALTORS®support more transparency
The pre-offer period is one of more than 30 recommendations that the BCREA has made on behalf of BC realtors to better protect consumers and improve housing affordability as part of a white paper called A Better Way Home: Strengthening Consumer Protection in Real Estate.
Buying a home is one of the biggest financial decisions we’ll ever make. Working with government, consumers, and other real estate sector stakeholders, the BCREA wants to help find a better way home for all British Columbians.
