Ontario to allow new home sales tactic that would change the bidding process
Published Tuesday, April 19, 2022 12:14PM EDT
Last Updated Tuesday, April 19, 2022 12:14PM EDT
The Ontario government is introducing new real estate regulations that would allow home sellers to share bids on their property and disclose the details of competing offers.
As the system stands now, individuals looking to put an offer on a home do so blindly, without knowing how much their competitors are offering above the asking price. The new regulation will give sellers the option to "opt for an open offer process."
"Sellers will no longer be limited to selling their property through a closed or traditional offer system," the Minister of Government and Consumer Affairs Ross Romano said in a statement to CTV News Toronto.
"With these changes, hard-working Ontarians can rest assured knowing that our government has their backs as they embark on their journey of home ownership.”
It is not yet clear what, exactly, sellers will be allowed to disclose under the regulation or how many will choose to take part in the process.
The new sales tactic is part of a larger regulatory change to the Trust in Real Estate Services Act (TRESA), which will go into effect on April 1, 2023.
The changes include a new code of ethics for real estate agents, simpler standardized forms and more powers to the Real Estate Council of Ontario (RECO), a regulatory body that enforces rules for salespeople and brokers.
"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."
Kevin Crigger, president of the Toronto Real Estate Board, applauded the government for bringing "further options to the home seller process."
"I think optionality is a good thing," he said.
Crigger added real estate regulations such as this, at both the federal and provincial level, are aimed at appeasing buyers and trying to find alternatives to affordability outside of the supply conversation.
The CEO of the Ontario Real Estate Association agreed, saying this policy strikes the right balance between adding more transparency to the offer and protecting the rights of home sellers.
"We called for the province to introduce these common sense reforms and we’re pleased to see them coming forward today," Tim Hudak said.
On the other hand, the leader of the Green party of Ontario issued a statement calling for a "consistently transparent bidding process."
“Home-sellers shouldn’t be able to pick and choose when the bidding process is transparent and when it is blind. That defeats the purpose of ending blind bidding, since it’s in sellers’ best interest to keep buyers in the dark," Mike Schreiner said. "Let’s end blind bidding and let’s do it properly.”
The new regulation comes as real estate brokerage Royal LePage predicts home prices will be up about 15 per cent by the fourth quarter of 2022.
In a record-breaking first quarter, Royal LePage said the average price of a home in Canada rose 25.1 per cent year-over-year to about $856,900. The average price of a home in the GTA is expected to surpass $1.3 million by the end of 2022.