As Canadians, we are lucky to have many rights and freedoms that other countries don’t have. However, the government is a constantly evolving entity, and sometimes what served our communities in the past isn’t quite up to the current standards of life and fairness that we collectively expect. 

One such example is the newly proposed Homebuyer’s Bill of Rights. This was a new idea proposed as part of the 2021 re-election platform for the Liberal Party. The Homebuyer Bill of Rights was also mentioned in the 2022 federal budget released earlier this spring and is something that should have a positive impact on the homebuying experience in Canada. 

Take a look at the 2022 Federal Budget in our blog post about it right here.

In this post, we’re taking a closer look at what you need to know about the Homebuyer’s Bill of Rights in Canada.

The Short Version of the Homebuyer’s Bill of Rights

It’s safe to say that the past few years have been a whirlwind in the real estate market. We’ve experienced one of the strongest Seller’s Markets in history. During the pandemic, it was completely normal to see homes go into multiple offer scenarios, selling high above the asking price, and selling mere days after getting listed. 

This competition created an environment that was not sustainable for buyers. Buying a home became something that wasn’t just a challenge, for some it felt downright impossible. 

The purpose of the Homebuyer’s Bill of Rights was to remove some of the roadblocks that made it harder for buyers to secure real estate. The purpose is to create an environment of transparency to help protect buyers and give them the tools and resources to make sound financial investment decisions. 

Are you thinking about buying a new home in Hamilton in the near future? Read some of these blogs to help you get started:

When Will the Homebuyer’s Bill of Rights Become Active? 

There is no formal “start date” to when the new Homebuyer’s Bill of Rights will become active. However, Canada’s Housing Minister is actively working with the provinces and territories to firm up and roll out the initiative over the next year. 

Blind Bidding in the Homebuyer Bill of Rights

One of the biggest newsmakers in the new Homebuyer’s Bill of Rights is the end of blind bidding. In our hot Seller’s Market, blind bidding was common. When properties go into multiple offers, sometimes you would see thousands or even tens of thousands of dollars between competing bidders. Seller’s agents are not actually allowed to disclose the contents of an offer to a buyer’s agent unless they have express written consent from the seller. 

When supply is low and demand is high, blind bidding can result in price increases, as buyers will pad their offers in hopes of winning the bid. By banning blind bidding, buyers will know exactly what’s in competing offers and can structure their offers accordingly, helping to keep prices lower. 

Want to learn more about blind bidding rules in Canada? Read our blog post about it here.

What Does the Homebuyer Bill of Rights in Canada Say About Home Inspections? 

Another common phenomenon during the pandemic was submitting “firm offers.” These are offers with no conditions. In many cases, buyers wanted to make their offers as appealing as possible, forgoing their right to a home inspection. 

Why would someone do this? It would help the transaction close faster and with no conditions, the offer was almost guaranteed to close. 

This is inadvisable on many levels since it’s sometimes difficult to see exactly what’s going on with a home with the naked and untrained eye. 

The Homebuyer’s Bill of Rights will give buyers the legal right to a home inspection, which is different from an appraisal. This means homebuyers will have more peace of mind when it comes to making sure their investment is sound. 

And they won’t miss out on purchasing a property by asking for a home inspection. 

In a hot market, buying a home sight-unseen has become popular. Here’s what you need to know about buying a house sight-unseen here.

Transparency and the Homebuyer Bill of Rights

One of the main goals of the Homebuyer’s Bill of Rights in Canada is to establish greater transparency in the real estate market. Blind bidding is only part of the equation here. 

The bill would also ensure total transparency on any recent house sale prices and title searches on the home, ensuring that buyers have the full picture of the property they are viewing. 

It will also require real estate agents to disclose when they are involved in both sides of a transaction. For example, when they are representing both the buyer and the seller. This is already a guideline for the Real Estate Council of Ontario (RECO), but it will expand this into law nationwide. 

Will Mortgage Lending Rules Change with the Homebuyer’s Bill of Rights in Canada?

Canada’s mortgage industry is currently one of the most regulated in the world. However, with the Homebuyer’s Bill of Rights, Canada is going to be getting even more transparent. The bill would see banks and lenders offering mortgage deferrals for up to six months in the event of a job loss or “major life event.” 

It would also place a legal responsibility on mortgage lenders to act in the buyer’s best interest when it comes to mortgage options and incentives. 

Financing your first home purchase is a big step! Here are a few resources to help you get started:

Is the Homebuyer’s Bill of Rights Good For Sellers?

At the end of the day, the Homebuyer’s Bill of Rights is designed to protect homebuyers in a competitive and challenging market. However, these rights will also benefit sellers too. With more due diligence and transparency, everyone wins. 

Additionally, someone who is selling their home will also eventually buy a home, so it’s important to know that these rights are here for you when you transition from seller to buyer. 

Whether buying or selling, you need a local Hamilton Realtor® who knows the market. If you have questions about making a real estate move in Hamilton, contact Michael St. Jean Realty today at 1.844.484.7653 or email us here.