Updated June 4, 2024 by Mike Stewart Realtor
Subject Free Offers are Powerful & Effective, but in Scary in the Wrong Hands!
With the resurgence of the Vancouver real estate market, Subject Free Offers are making a comeback along with Multiple Offer Situations. The downside is that without preparation and professional advice, mishandled these powerful offers can quickly result in lawyers getting involved making it expensive and painful for all.
UPDATE – Subject Free Offers No Longer Powerful – Home Buyer Rescission Period or “3 Day Cooling Off Period”
In January 2023, the BC government introduced the Home Buyer Rescission Period HBPR or “3 Day Cooling Off Period” for the purchase of existing properties in British Columbia.
Home buyers who submit subject free offers on properties can rescind or kill the deal for 3 days after the accepted offer date if they pay the seller .025% of the purchase price.
The current provincial government has brought in this poorly thought out legislation as part of their electoral campaign to be seen to be “doing something” about real estate in BC.
In practice, the 3 rescission period only works to increase cost, uncertainty, hassle, and wasted time.
To learn more about this please check out our detailed explanation of the rescission period for existing properties in BC.
What is a Subject Free Offer?
A Subject Free Offer is an offer prepared by the Buyer that does not allow the Buyer to walk away for ANY reason if the Seller accepts. (The buyer can now, see above)
If the Buyer cannot get a mortgage on the property, TOO BAD the Buyer MUST complete the deal.
If the property turns out to be a Leaky Condo or contains Asbestos TOO BAD the Buyer MUST complete the deal. (The buyer can now, see above)
Why Use Subject Free Offers?
Competition!
In a highly competitive Multiple Offer Situation presenting a Subject Free Offer makes a Buyers offer MUCH more attractive to a seller.
Subject Free Offers are a sure thing, the Buyer cannot walk away. Offers with Subjects on them often take up to 7 days to become firm and binding and 15-30% of Subject offers fall apart.
How to Safely Use Subject Free Offers!
1) Hire a qualified Realtor to help you with your due diligence and to prepare the offer for you. If you have questions your Realtor can’t answer CALL A LAWYER!
2) Do you homework! Make sure you get something in writing from your bank or lender confirming you can get financing on the property you want to submit a Subject Free offer on. Make sure you get your building inspection done before you submit your offer. Make sure you have gone over all the documentation associated with the property and your Lawyer and your Realtor has answered all your questions, so that everything is 110% crystal clear to you!
3) When in doubt don’t submit a Subject Free Offer. Remember! You can’t back out! (You can now… see above)
Buying your first home in Vancouver? Check out my videos for First Home Buyers in Vancouver!
Drop me a line if you have any questions and I’d love to see your thoughts and questions in the form of a comment below!