A bidding war might take the cake as one of the most stress-inducing moments in one’s adult life. Wannabe homeowners are expected to make an offer, all the while being kept in the dark about the prices of other bids. All they know is how many others are on the table.
That might be about to change in the province of Ontario.
The provincial government launched a consultation on Thursday to review the Real Estate and Business Brokers Act, 2002. One change to the Act it’s looking at making is to do away with the secrecy that surrounds bidding wars. Ontario might allow realtors to share competing offers with prospective homebuyers.
If there are multiple bids on a home, potential buyers can only know how many there are, but not the details of them. The price is kept secret, as are other conditions of the offer. This can often result in buyers blindly offering more than they initially planned on spending just for the sake of potentially beating out their competitors.
It’s no wonder some people bow out of the experience altogether.
“It has been almost two decades since the last comprehensive review of the Real Estate and Business Brokers Act. The market has dramatically changed since then,” said Bill Walker, Minister of Government and Consumer Services. “Our government is looking for input from the public, including homeowners, renters and real estate professionals, about strengthening the legislation so the people are better served.”
Bidding wars are anxiety-inducing. But they’re also incredibly common in the Toronto real estate market, where trying to find a place to live is like fighting 10 other people — blindfolded — for the last seat at the dinner table. Sometimes, they result in ridiculous prices being paid for rather underwhelming homes that might also need a lot of work.
“Allowing registrants to disclose the details of competing offers to other bidders may benefit both buyers and sellers by making this process more transparent,” the government’s review document says. “Prospective buyers would have better information to inform their decisions, while sellers would know that potential buyers had not been deterred by the prospect of a blind bidding war.”
Realtors themselves have been pushing for this change.
“The rules governing realtors were set 16 years ago, when smartphones weren't invented and fax machines were the norm,” Ontario Real Estate Association CEO Tim Hudak said in a statement to CBC News.
“The industry has changed tremendously since then. It's time for the legislation, as well as enforcement and education to catch up with the modern real estate market. Updating the rules will increase professionalism in our industry, which is what realtors want and what home buyers and sellers deserve.”