The real estate market can be crazy at times.
Never more so than in the past few months. Every day it seems we’re seeing new stories about higher and higher prices, insane bidding wars, people getting priced right out of their homes, unscrupulous agents pocketing huge profits from shady practices.
Last Wednesday, it all came to a head.
The BC government announced a series of new rules that will change how the real estate industry operates in the province. The announcement came on the heels of a report by an independent advisory committee that spent 15 weeks examining the way the real estate industry is regulated and practiced in the province. It made 28 recommendations. The government hopes new rules will help restore the public’s trust in the industry.
What it won’t do is affect prices in any substantive way, or suddenly create downward pressure on the real estate market. That’s driven by supply and demand. And right now there’s not enough supply to meet the demand.
Big changes in red hot real estate market
The biggest change the government announced on Wednesday is the real estate industry will no longer regulate itself.
Since 2005, BC realty companies and their brokers have operated under the Real Estate Services Act, which granted the industry the responsibility for its members’ activities, how realtors are licensed and ensuring realtors meet a high standard of conduct. The Real Estate Council made the rules, enforced them and investigated and disciplined violators.
That’s about to change.
The Real Estate Council will still exist, but most of its members will now come from outside the real estate industry. And it will have a boss, a superintendent of real estate – appointed by the government – who will take over the duties of making the rules and enforcing them.
Breaking the rules will come with bigger consequences. Realtors who commit violations could be fined up to $250,000, up from a maximum of $10,000. Realty firms could face fines up to $500,000 for unscrupulous practices.
There will be new rules. Real estate agents will no longer be able to represent both the buyer and seller in a transaction. Realtors caught making shady deals will have to return commissions they earned from those deals to the sellers. And it will become easier for the public to file complaints about unscrupulous real estate practices.
Real estate is a business built on relationships and based on trust. Unfortunately it only takes a few bad apples to erode that trust. And while no one ever welcomes the intrusion of even more bureaucracy, hopefully these new measures will restore the public’s faith in us so we can focus on what we do best, finding you a new home!
Report of the Independent Advisory Committee on Real Estate Practices in B.C.