Ontario to give home sellers option to allow open bidding process
The Ontario government is introducing new real estate regulations that would allow home sellers to share offers on their property and disclose details of competing offers.
As the system currently stands, people looking to bid on a home do so blindly, not knowing how much their competitors are offering above the asking price. The new regulations will give sellers the option to “opt in to an open offer process”.
“Vendors will no longer be restricted to selling their property through a closed or traditional bidding system,” Government and Consumer Affairs Minister Ross Romano said in a statement to CTV News Toronto.
“With these changes, hard-working Ontarians can take comfort in knowing that our government is supporting them as they embark on their journey to homeownership.”
It’s not yet clear exactly what sellers will be allowed to disclose under the settlement or how many will choose to participate in the process.
The new sales tactic is part of a larger regulatory change for the Trust in Real Estate Services Act (TRESA), which will come into effect on April 1, 2023.
Changes include a new code of ethics for real estate agents, simpler standardized forms and more powers for the Real Estate Council of Ontario (RECO), a regulatory body that enforces the rules for salespeople and brokers.
“These settlements also allow RECO to prosecute bad actors who take 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 these powers to RECO, we are streamlining and expediting the process needed to resolve issues and ensuring real consequences for those who act in bad faith.”
Kevin Crigger, chairman of the Toronto Real Estate Board, applauded the government for bringing “other options to the home selling process”.
“I think optionality is a good thing,” he said.
Crigger added that real estate regulations like this, both federally and provincially, are meant to appease buyers and try to find affordability alternatives outside of the supply conversation.
The CEO of the Ontario Real Estate Association agrees, saying the policy strikes the right balance between adding more transparency to the offering and protecting the rights of home sellers.
“We asked the province to introduce these common-sense reforms and we are happy to see them happen today,” said Tim Hudak.
On the other hand, the leader of the Green Party of Ontario released a statement calling for an “always transparent bidding process“.
“Direct sellers shouldn’t be able to choose between when the bidding process is transparent and when it’s blind. This defeats the purpose of ending blind bidding because it is in the sellers’ interest to keep buyers in the dark,” said Mike Schreiner. “Let’s end blind bidding at the blind and let’s do it right.”
The new regulations come as real estate brokerage Royal LePage predicts home prices will rise about 15% by the fourth quarter of 2022.
In a record first quarter, Royal LePage said the average price of a home in Canada rose 25.1% year-over-year to around $856,900. The average home price in the GTA is expected to exceed $1.3 million by the end of 2022.