Real Estate Offers With No Conditions Pose Threat To Brokers
Brokers had shown concern over the breakneck pace of British Columbia real estate transactions. They were claiming that agents had clients sign a form detailing the risks when offers were made with no conditions.
Sotheby's International Realty had forwarded a notice to its agents with a form asking for formal client acknowledgment that there was a possibility of serious consequences with an offer that included no conditions. Furthermore, the notice emphasized that a transaction such as this would be required to undergo financing and property inspections in the future.
Polly Cordwell, the Sotheby's managing broker, stated that one thing that concerned observers was the option for a bank to decline appraisal for a property at that price. Brokers who could not get proper financing risk losing their major deposits. They also risk the chance of getting sued, according to a feature from The Globe And Mail.
Cordwell stated that almost 100 percent of the offers that the agency was seeing as of late were being made without proper conditions. Prices had spiralled to record heights in Vancouver and throughout the region. The Sotheby's form asked buyers to understand that lenders had the option not to approve financing if the property's appraisal and the conditions of the property pertaining to value were unacceptable to the financial institution, even if a pre-approval had been obtained.
It also warned them that providing an offer in the absence of a property inspection could lead to expensive repairs later on.
Dustan Woodhouse, a broker who mostly served clients in the Tri-Cities area, stated that he had eight clients in the first half of the year who had all opted to make subject-free offers. He said that he was contemplating an agreement to make it clear that at no time can he ever advise any client that they will be 100 percent safe to opt for a subject-free transaction.
Brokers will face great difficulty in the market if a consumer with pre-approval failed to understand that it had been little more than a rate holder, according to a feature from Press Release Rocket.