The Ontario government has introduced new real estate legislation effective a year from now that would allow homebuyers to see all their competitors’ bids on the property, that is, if the seller agrees to disclose the information.
Under the current system, a potential buyer looking to put an offer on a house has done so blindly, without knowing how much their competitors are offering above the asking price.
On April 19, Ontario’s Minister of Government and Consumer Affairs Ross Romano announced the new regulation that would give home sellers the option of an open-offer process. Real estate agents, who have been prohibited from sharing the specifics of competing offers, can now do so with the permission of their seller clients.
“Sellers will no longer be limited to selling their property through a closed or traditional offer system,” Romano said in a statement to CTV News.
It is not clear how many sellers would use the open bidding system, as the traditional blind offer process could possibly lead a potential buyer to unknowingly offer more than the previous highest bid.
When sellers opt for the open offer process, they will have to share the agreed-upon “open” information among all buyers who made an offer on a property.
The changes include a new code of ethics for real estate agents, simpler standardized forms, and additional powers granted to the Real Estate Council of Ontario (RECO), a regulatory body of home brokers and salespersons.
“These regulations also allow RECO to go after bad actors taking advantage of vulnerable Ontarians by emboldening their disciplinary processes and expanding the scope of their jurisdiction to encompass the entirety of TRESA,” Romano said.
“By giving RECO these powers, we’re streamlining and speeding up the process needed to resolve issues and ensuring real consequences for those acting in bad faith.”
“Unfair practices like blind bidding or asking buyers to waive their right to a home inspection can make the process of buying a home even more stressful for too many Canadians. To help level the playing field for young and middle class Canadians, the government will take steps to make the process of buying a home more open, transparent, and fair,” the budget reads.
Meanwhile, some of Canada’s real estate associations that have opposed the federal plan, said that banning blind bidding would not bring down housing prices and would instead deprive homeowners of the choice of how they want to sell their homes.
