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The Government of British Columbia says it wants to help protect home buyers by introducing “cooling off periods” for most home sales.

The move would allow buyers of both resale properties and newly built homes a set period in which they could back out of a sale with “no or diminished legal consequences,” the B.C. government said in a release.

“People looking to buy a home need to know they are protected as they make one of the biggest financial decisions of their lives,” Selina Robinson, B.C.’s Minister of Finance,” said in a statement. “With this step, we’re moving ahead to protect people and their interests in the real estate market by bringing in a cooling off period for homebuyers and looking at additional measures to ensure effective safeguards are in place.”

Buyers of pre-construction units in condominium developments already have a seven-day cooling off period under the province’s Real Estate Development and Marketing Act.

The government said it expects to draft and enact the legislation next spring, but not before a consultation period with key stakeholders. The B.C. Financial Services Authority (BCFSA), which is the single regulator for the financial services sector in the province, including real estate services, will carry out those consultations to help determine the specific parameters of the planned legislation.

BCFSA will also look into other practices that “may pose risks to consumers,” including blind bidding and waiving of conditions on home purchase offers.

“BCFSA’s goal is to ensure that British Columbians are protected when buying and selling homes – one of the most important financial transactions of their lives,” said Blair Morrison, CEO of BCFSA and superintendent of real estate. “Both buyers and sellers need to be supported and have time to make good financial decisions.”

Action Needed in Face of Hot Housing Market, Government Says

Measures must be taken in the context of “robust real estate market activity, where concerns have been raised that buyers may be purchasing a home without everything they need to make fully informed decisions,” the government said in its release.

The latest housing data shows continued price gains in many key markets throughout the province as demand continued to outpace available new housing supply.

In Greater Vancouver, the benchmark price for all property types reached $1,199,400 in October, a 14.7% jump from last year. The gains are even higher in other markets, such as Shuswap/Revelstoke (+35.7%), North Okanagan (+31%), Whistler (+29.9%) and Maple Ridge (+29.3%).

“Especially in periods of heightened activity in the housing market, it’s crucial that we have effective measures in place so that people have the peace of mind that they’ve made the right choices,” Finance Minister Robinson said.

BCFSA is expected to start its consultations with stakeholders, including industry associations and real estate boards, in the coming weeks.

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