Changes to the offer process may improve things for buyers.
The Toronto real estate market has been plagued with a lack of supply for some time now. This had led to a sellers’ market where there is often more than one bid on a property that is listed for sale.
Multiple offers are commonplace and are often expected by sellers on many downtown properties.
When there are multiple offers on one house, the listing agent can only disclose the number of offers but not give any details on any of them. Usually many bidders on a property do not find out the final sale price until it is published on the MLS, usually the next day.
This may all soon change. The Ontario Real Estate Association has been calling for more transparency so that buyers can make a more informed purchase decision.
In order to win the house at all costs, the buyer will often “blindly” bid way higher than the next closest bidder to be the winner. The winning bidder often does not know whether they have beat the next offer by $10,000 or by $100,000. In a traditional auction setting, everyone knows what all the other interested parties have bid. By incrementally increasing the price so that everything is transparent, no one bidder ends up paying too much unnecessarily. Quite often now buyers end up paying more than they initially intend to because of how the system is set up.
Many Toronto real estate agents believe that they should employ every tactic available to them to get their seller clients maximum dollar. I’m all for that so long as the agent acts ethically, and no lines are crossed. There can’t be any misrepresentations and everything that is disclosed to the buyers’ agent must be true. I’ve seen it happen many times where the communication during the offer process is not clear and the likelihood of something going wrong increases.
I appreciate that Sellers can try and get as much as they want for their property and as agents, it is our job to help facilitate that. However, there should be more fairness across the board for all parties. For example, I submitted $150K over the asking price on a triplex last night and I didn’t even get a phone call back. It is now the next day and I still don’t know what happened last night. I feel that this is unfair to my client who put a great deal of effort into getting a bank draft and writing a condition-free offer. Yes, someone else ultimately paid more, or had their price dragged up by the listing agent, but we still should have been told that they were going to pass on our offer. I agree that a fairer and more transparent process should be introduced across the board so that the playing field is a little more even for everybody.