Will the Government’s Plan for Buyers Work?
Will the government’s plan to alleviate buyers work out as intended?
“Will the new B.C. government’s cooling-off period have the intended effect of cooling off our market and giving buyers some reprieve?” Today we’re going to unpack this recent headline.
The B.C. government has great intentions to give buyers some reprieve from this red-hot market. Obviously, it’s been very frustrating to have to make unconditional, blind offers on properties just to have a hope of getting them. We’ve worked with hundreds of buyers this year who felt exactly this way.
On the flip side, with the risk now being transferred back squarely in their hands, sellers have to consider which buyers they allow to purchase their properties. By that, I mean sellers are being bombarded with offers—as many as 10 to 15 offers on a single property! When one of those offers is all cash, it makes the seller’s decision quite easy because it removes the risk. But if none of them are cash, which reduces the risk of a deal not closing, then sellers need to take a good hard look at who the buyer is and what their likelihood is to perform. Ultimately, the unintended consequence of the government’s actions will be how buyers are treated in the purchase process.
Will this have a massive effect on price? No, it won’t. Will it change the current supply and demand dynamic? Again, I don’t think so; it might be that in the short term, some people may rush to get their homes on the market in advance of these new rules, causing a glut of inventory in a time where there’s already traditionally fewer homes selling.
At present, homes are still selling very quickly. If you’re thinking of getting your home on the market, now is a great time to do so. I don’t foresee a massive panic happening in the spring; some adjustments may have to be made. In fact, in the pre-construction market, there’s a seven-day rescission period on any new constitution product. Similarly, there have been changes to the transparent bidding system; they’ve removed blind bidding, so you don’t have to worry about paying $50,000 or $100,000 more than the next closest bid. That could help level the playing field for buyers.
It’ll be interesting to see if this will create a stampede to the back door for sellers who intended to sell their homes next year but are now trying to beat everyone else to do it sooner. We’ll keep an eye on any developments and keep you informed of what we see.
If you have questions about today’s topic or anything else to do with real estate, please feel free to give us a call or send us an email. We’d love to hear from you.