Conditional Sales - What you need to know!
Major industry chanes have been rampant and this is just one more! Now when a home is listed on MLS we have no certainty that it is actually available because home seller’s realtors are no longer required to report pending or conditional sales. So what does that mean to you if you are buying or selling real estate?
This is a change that was implemented in Vancouver, then Edmonton and now in Calgary. The feeling is that it is not fair to home sellers to force them to discontinue marketing their property prior to having a firm sale.
Now, with the rule changes, a Seller can choose to give written instruction to not report the conditional sale of their property until conditions are fully waived in writing. In the past, once an offer was accepted on a property, the status was moved to “pending” (conditionally sold) and the listing was removed from the MLS (Multiple Listing Service). The change to non-reporting benefits home sellers because using the old system potential buyers would no longer find that home and if the sale fell through then home sellers would have missed valuable marketing time. This amendment increases the chances of a back-up offer.
The old rule of forced reporting was introduced before fax machines, the MLS, even before home inspections and condo conditions. The old rule would not hold up in today’s court room and that is why it needed to change. Today, offers on properties are accepted without certified cheques, faxed offers without deposits, and with home inspections clauses and condition document reviews required to the buyer’s sufficiency. This new rule that could withstand the scrutiny of a Court of Queen’s Bench Judge, a rule that ensures an agent is not in violation of delaying reporting a pending sale. It is anticipated that sellers will continue to want to report a pending sale, but in the rare instance that a Seller wants no disclosure, they are now being accommodated by rule and regulation 18.02.
The change can hurt the buyer. Now the first warning of a home you’re interested in being conditionally sold is in the counter-offer stage. This is particularly troublesome for out of town buyers because they could spend their limited time looking at properties only to find out that they are conditionally sold and that their trip was wasted. The old system insured that those buyers searching for a property wouldn’t find it, get their hopes up, and make an offer on a home to find it was already spoken for, exactly the opposite of what the new system will allow to happen. The buyer’s agent can inquire if the property is C/S before it gets to that far, but that information doesn’t have to be made public.