Regulations to curb phantom bids in Ontario are generating interest in Vancouver where a hot real estate market has sent prices skyrocketing.
But not everyone believes that Vancouver needs to be compared to Toronto in this regard.
“I don’t think (phantom bids) are that widespread here because the market is so hot and active here that it doesn’t make much sense; there’s way more risk than reward,” Darcy McLeod, president of the Real Estate Board of Greater Vancouver (REBGV), told REP. “We see more than 10 bids on homes at times so one more phantom offer doesn’t do much to affect house prices when there are already so many bids.”
His comments follow a column in the Vancouver Courier, citing the need for a crackdown on phantom bids similar to new regulations taking effect in Ontario on Canada Day.
Under these rules drawn up by the Ontario government and Ontario Real Estate Board, real estate agents are no longer allowed to tell a potential buyer there is a competing offer unless that offer is signed, sealed and delivered.
Any doubters surrounding the validity of the offer can contact Real Estate Council of Ontario and the listing agent will be required to show proof. If the agent has fabricated the offer, they may be liable for a substantial fine or jail time.
In Quebec, similar moves have been made, according to one agent on the REP forum.
“In Quebec, we have a brokerage law requiring to archive a copy of each and every offer. We also need to keep a list of each offer (accepted or not) for our annual report (and for potential annual inspection),” the agent said.
“Also each party should have a copy of the signed offer (buyer, seller, listing broker and collaborating broker). If you have any doubt about the number of effective offers, you can ask for assistance. Simple and efficient.”
McLeod said the REBGV have taken measures to possibly ban agents from the MLS for placing a phantom bid, which he believes has deterred most from utilizing the controversial move.