3 Ways Sellers Can Optimize Their Listings

Are you thinking of selling your home in 2023?!
Here’s 3 ways You Can Protect Yourself as a Seller in the new age of the Home Buyer Rescission Period

The Home Buyer Rescission Period (HBRP) came into effect Canada wide on January 3rd, 2023 to protect consumers during competition and blind bidding. As of January 3rd unless the property was exempt (ie. leasehold, new development, co-op) the buyer had a 3 business day window to rescind their offer and unlike a subject, the buyer would not be limited to a specific reason why BUT they would be required to pay a  rescission fee which equals .25% of the purchase price. ($2500 per million)

Since this legislation was enacted during a stale winter market that saw Days on Market triple in East Vancouver; subject free offers were a distant memory and the attitude was “too little too late” from consumers and industry professionals alike.

 But as January continued on, open houses got busier and the stale holiday inventory started to disappear. February 1st came and whether it was a reaction to the Bank of Canada’s hint that we may have seen the last increase to the policy interest rate on January 25th or consumers were listening to their agents telling them we were close to bottom price-wise; that open house activity turned to offers. 

Competition and subject free offers have returned much sooner than expected to Vancouver! This is great news for Sellers that have been waiting to list their home but how do Sellers protect themselves against a legislation that is skewing some of the power to the buyer?

As a seller, here are three things you should do to protect your interests!

1. Deposit Structure
   While the HBRP allows for the seller to access the rescission fee via a deposit (skirting the usual need for both parties to agree to release deposit funds); the deposit structure is still a negotiable term of the contract and neither realtor is responsible for helping you retrieve those funds directly from the buyer if they have yet to deliver a deposit.  So, as a seller if you are expecting competition, request at least a .25% deposit if not the full 5% deposit upon acceptance.
   
   
2. Back-up offer
   Timing is essential in Real Estate!
   Since a buyer exercising their right of rescission could set you back for the better part of a week depending on when the offer was accepted; if you had multiple offers, you should be lining up at least one back-up offer! A back-up offer is an offer that is subject to you (the seller) no longer being obligated in any way concerning the sale of the property. The key with the back-up offer here is that the rescission period begins at the time of acceptance, not the time of the other offer rescinding. Let’s say you hold offers until Tuesday at 12pm. You get 5 offers, accept the best, negotiate a back-up offer and both are accepted on Tuesday. Assuming no holidays that week, the rescission period for BOTH offers starts on the following business day (Wednesday) and ends at 11:59pm on Friday evening.  So if the first offer rescinds at any point, the back-up offer would only have until 11:59pm on Friday to rescind. Leaving you with much greater odds of a firm deal on Saturday!
   
   
3. Work with an agent that is well versed in the rescission period.
   You don’t need an agent to tell you that 1,300,000 is more $$$ than 1,250,000; use an agent that can talk you through a strategy to protect your time and energy instead of just “Sold For Over Ask”.
   
   If you have any questions, please reach out.
   Let's chat about whether it's the right to time to list your home!