B.C. homebuyers now have a 3-day cooling off period. Should Ontario have one too?

British Columbia has become the first province to require a three-day cooling-off period for buyers after they've signed a contract to purchase a home.

The move will give added protections when making such a large purchase and help buyers avoid high pressure sales tactics, arrange for a home inspection, give buyers more time to secure financing and extra time to be sure the purchase is right for them.

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The cooling-off period is for three business days and the B.C. government said it will offer an additional layer of protection for buyers and realtors will have to warn clients they have three days to change their mind

During the red-hot real estate market across the country there were buyers who got caught up in bidding wars, made hasty decisions and then regretted signing a contract. Some had to walk away from deals and lost down payments worth tens of thousands of dollars.

Even though the cooling-off period is law in B.C. it’s not clear how much support there would be for a similar policy in Ontario.

“I'm not a big fan of these cooling-off periods, because the whole market will be suspended or at least that property will be suspended for three days and that's not a good thing," said Murtaza Haider, associate professor of real estate management at Toronto Metropolitan University.

Haider said while a cooling-off period could help those who didn't do their due diligence before signing a contract, he feels it could unfairly allow buyers to make offers on multiple properties.

“Individual buyers may end up putting four or five offers simultaneously saying whichever gets accepted and which ever we like, we'll keep that and get out of the others,” Haider explained.

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Tim Hudack, CEO of the Ontario Real Estate Association (OREA), said you need to have rules for the real estate market that will work for both buyers and sellers in good times and tougher economies as well.

“Whenever you bring in changes to the real estate market you need to make sure that it works in times when there were high levels of demand like February and March and in times like today when there is less demand in the marketplace," Hudak said.

Hudak also believes a cooling-off period gives buyers an unfair advantage.

“You could have a speculator with a lot of money put offers on a number of homes simultaneously, and then go back and put a gun to the head of the seller and say I will walk away from this deal unless you lower the price," said Hudak.

CTV News Toronto reached out to the Ontario government and Jeffery Stinson, spokesperson for the Ministry of Public and Business Service Delivery, said in a statement, “Our government believes that hard working Ontarians deserve to be treated fairly when making one of the biggest purchases of their lives. That is why we further strengthened consumer protections for new home buyers by doubling the maximum administrative monetary penalties for unethical builders.”

“Furthermore, under the Ministry of Public and Business Service Delivery, the Condominium Act provides purchasers of new or pre-construction condominium units with a 10-day cooling off period in which they may rescind their Agreement of Purchase and Sale.”

“The ministry is committed to improving the lives of Ontario consumers and continues to monitor the impact of all recent changes it made to strengthen consumer protections through the Trust in Real Estate Services Act, and the other jurisdictions such as British Columbia, in considering any further legislative or regulatory changes. The ministry also strongly encourages all new home purchasers to seek legal advice before signing an Agreement of Purchase and Sale.”

CTV News Toronto also reached out to the Toronto Regional Real Estate Board (TRREB) and President Paul Baron said in a statement, “TRREB agrees with the approach that has been adopted by the Ontario Ministry of Public and Business Service Delivery. The Ministry has indicated it will monitor the approaches and experiences of other jurisdictions, including those that have introduced a cooling off period for homebuyers, to inform any future policy work and decision-making for government consideration.”

“TRREB also agrees with the position adopted by the British Columbia Real Estate Association (BCREA). BCREA does not believe a ‘cooling-off period’ is the answer to alleviating the stresses consumers are currently facing in real estate transactions and thinks that it will not stand the test of changing market conditions and regional market differences.”

“It also does nothing to address the root of the housing affordability problem; namely, lack of supply. Any policy change in this area should equally protect all parties involved in real estate transactions, while also contributing to a smooth functioning market and improved housing affordability. According to BCREA, an analysis of cooling-off periods in other global jurisdictions has shown the policy to be “ineffectual at best.”

It may take a year or two to measure the real impact the cooling-off period will have on B.C’s real estate market.