In the Toronto market, bidding wars have been commonplace and each Spring the setting is very much the same.
You decide to submit an Offer on a property and a few hours later before your agent gets an opportunity to submit it, you hear “there’s another Offer”.
Is there, really, or is the listing agent just trying to crank up your price?
The sad reality is that some agents, acting unethically will do just that. They’ll say there’s another Offer from another agent, but there isn’t.
The difficulty until now has been “proving it”.
However, things will improve following new changes to the Real Estate and Business Brokers Act, 2002.
- The buyer’s agent cannot say that they are making an Offer, if it’s not in writing
- The seller’s agent cannot say that they have an Offer, if it’s not in writing
Once presented, the seller’s agent will have to keep a copy. No turning them back. They are now obligated to retain copies.
These copies are to be made available for examination by the inspection and audit departments of the Real Estate Council of Ontario.
Brokerages are obligated to ensure that their sales representatives retain copies. This will be the proof that there really was a bidding war.
Until the change, no one had to keep copies. Who knows if there really was a bidding war? All the buyer knew was that he:
- Increased his offered price to his top bid
- Removed his financing condition
- Removed his appraisal condition
- Removed his insurance condition, and
- Removed his home inspection condition
So, let’s hope he wasn’t just bidding against himself!
Note: the Ministry of Consumer Services has proposed legislation to assist consumers faced with the uncertainty of bidding wars in real estate transactions.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through RE/MAX West Realty Inc., Brokerage 416-745-2300.