Transparent real estate bidding in multiple bid situations is something that’s been getting quite a bit of buzz lately. And it’s not because the market is as hot as it once was, and listings are selling under tight bidding wars with 10+ buyers in the ring – it’s because the Ontario government is considering modernizing the real estate rules around multiple offer situations.
OREA rules currently state the listing broker is only accountable for stating how many bids are on the table, not the amount of each bid. Other things that must be disclosed include:
- If you or your brokerage are representing both the Seller and a potential Buyer
- If you or one of the other buyer agents is reducing the amount of the co-operating commission
- Any changes to the offer process – for example, your client didn’t want to review pre-emptive offers but now wants to review them
New Transparent Real Estate Bidding Proposal
The group representing Ontario’s real estate agents is considering urging the provincial government to allow a transparent bidding process for home sales as part of several proposals to improve the industry’s ethics and reputation.
The Ontario Real Estate Association (OREA), has been promoting higher standards in light of concerns raised about unethical practices within the real estate market within Ontario and Toronto.
Those in favour of bringing transparency to real estate say it would aid in managing mistrust and prevent buyers from wildly overpaying. Under such a process, which would be optional, all prospective buyers would know what the other parties have offered, similar to an auction.
However, everyone involved – the seller and all bidders – would have to consent to an open process, which OREA acknowledged might be a challenge. Current rules prohibit real estate agents from disclosing the contents of offers to other parties with the exception of the home seller.
Transparent Bidding & Buying a Home or Condo
If these new rules around transparent real estate bidding are indeed passed and enforced, buyers will be benefitting the most when it comes to purchasing their dream home in Toronto, that might be the dream home of 10 other people.
Gone will be the situations where you’re going in blind, getting your hopes up and crossing your fingers that you and your realtor have put in the right bid. Gone will also be the disappointment and feelings of never being able to find a home.
Your budget will be your budget, and you’ll never need to feel like you need to go beyond what you can afford to simply “win” the house or condo. Having a level playing field will benefit everyone involved and make the bidding process more auction-like, should you find yourself in a multiple offer situation.
Transparent Bidding & Selling a Home or Condo
If transparent real estate bidding becomes a reality, sellers and their realtors will be forced (hopefully) to price their home or condo according to market values, rather than use the strategy of forcing bidding wars.
Bidding wars don’t really benefit many, and in fact, cause frustration and added stress for all parties involved in the buying and selling process. We’ve never been a huge supporter of this strategy regardless of which side we sit on. Will bidding wars still occur? Yes – there is no way around it. If two people love a home and want to pay over market value, you’re still going to see it happen.
But with a level playing field, buyers won’t be forced to make an emotional decision that they can’t afford, and sellers will get a fair number for their home at current market values. A win-win for everyone in or trying to get into the Toronto Real Estate market in 2019 and beyond.