The Ontario government has announced new real estate regulations that could change the way bidding processes play out. In mid-April, it was announced that new regulation would allow home sellers to share bids on their property and disclose the details of competing offers.
As the system stands today, bidders are left “blind” during the process. Aside from being able to inquire how many other offers are on the table, no other details are released. This leads to high-pressure buying due to fear of being outbid. This new process will allow the seller to opt for an “open offer process”, no longer limiting them to selling their property in a closed offer system.
It is not yet clear how much information the seller would be able to disclose to bidders, but there is one distinct fact about this new regulation… it’s completely optional to the seller. So it is unclear how many sellers will take advantage of this new system.
This new regulation is part of a larger regulatory change to the Trust In Real Estate Services Act and goes into effect on April 1, 2023. Changes include a new code of ethics for real estate agents, simpler standardized forms used during the buying process, and more powers to the Real Estate Council of Ontario (RECO), a regulatory body that enforces rules for agents and brokers. RECO’s increased power will also allow them to go after agents/brokers taking advantage of vulnerable Ontarians, emboldening disciplinary processes, expanding jurisdiction, and providing real consequences to those acting in bad faith.
However, there have been calls to end the blind bidding process altogether. Some still feel that sellers shouldn’t be able to pick and choose when the bidding process is transparent or closed, since it leaves buyers in the dark and is largely in the seller’s favour. What happens with these calls remains to be seen as the Ontario government continues to fine-tune these new standards.
For now, though, this new regulation is a step in the right direction and a solid starting point to further bolster buyer’s confidence in the home buying process.
