Combination of above‐average sales with below‐average listings is placing strong upward pressure on home prices, for all residential categories, month‐over‐month. Months of inventory available for the entire Fraser Valley, for all types of housing is sitting at 0.5 Months. Meaning, in about 2 weeks, if no new homes hit the market, there would be nothing left to sell.
Cooling off Period
On November 4th, the government announced a new legislation set to be introduced in the Spring of 2022, called the Cooling off Period. This will allow buyers to get out of a deal, after it is accepted without any legal or financial consequences. The duration of time the buyer has to “cool off” is not yet clear.
This process is currently used for pre-sales (new development) when a buyer purchases a home directly from the developer, usually in the pre-construction phase. Upon getting an offer accepted on a pre-construction home, the buyer has a 7 day rescission period where they can get out of the deal, no questions asked with no legal or financial consequences. However, this has never been the case with resale properties.
Currently, with a resale property, once an offer is accepted and subjects (if any) are removed, the deposit is due and held in a trust account until completion. It is at this time that the home is considered sold. However, what the government is suggesting now, is that even after subjects have been removed, a further cooling off period will be allowed, granting the buyer the right to still walk away or change their mind without consequence. It is unclear what the duration of the cooling off period will be.
I understand there is concern over buyers going in subject free. However, When a property is listed in a hot market, there’s usually already a period of around 5-7 days where people can prepare for the offers they write before the offer acceptance deadline. In my opinion, even with the cooling off period, there will be multiple offers on homes due to the massive supply shortage. This will continue to result in buyers submitting offers putting their best foot forward (in some cases subject free offers) in hopes of getting their offer accepted over others.
I do not believe this will help cool the market off at all. In fact, I would argue it will have the reverse effect and make it even that much more difficult & frustrating to put a deal together. What is stopping Buyers from writing multiple offers on different properties and then walking away from the ones they decided against? Sounds like a large waste of time to me.
Why are we not addressing the real issue, which is LACK OF SUPPLY. I am surprised we are not looking at rezoning some ALR land as a solution. Why are thousands of acres off limits to development in regions where it matters the most?
I would love to hear your thoughts; firstname.lastname@example.org