The Ontario government may soon amend the Real Estate and Business Brokers Act, and if successful it could prevent the kind of runaway market prices that have rendered Vancouver and Toronto unaffordable.
Consultations were launched late last week to determine whether or not REBBA needs updating so that if there are multiple offers on a property, a seller’s broker must disclose details on all of them.
Sunny Sharma, president and co-owner of Leading Edge VIP, says that could avert the kind of rapid, unruly price escalation that has single-family detached homes in Vancouver selling for more than $1 million.
“If bids were all open, people wouldn’t blindly bid $50,000 or $100,000 more than their competitor—maybe it would just take a few thousand more,” he said. “If bids were open, we wouldn’t have those absurd price increases caused by bidding wars like we saw in Vancouver and here in Toronto.”
According to the Ontario Real Estate Association, open bids would enhance the professional standards to which sales agents are held and protect consumers.
“The rules governing realtors were set 16 years ago, when smartphones weren’t invented and fax machines were the norm,” OREA CEO Tim Hudak said in a statement. “The industry has changed tremendously since then. It’s time for the legislation, as well as enforcement to catch up with the modern real estate market. Updating the rules will increase professionalism in our industry, which is what Realtors want and what home buyers and sellers deserve.”
For the last couple of years, OREA has lobbied for REBBA review and Minister of Government and Consumer Services Bill Walker is at least willing to entertain the idea, albeit with public input.
“We need to make sure the rules governing real estate professionals, and the brokerages that employ them, are efficient, fair and up-to-date with modern realities,” Walker said in a statement.
While open bids could conceivably keep homes on the market longer, Sharma says that isn’t such a bad thing considering that, when making one of the most important financial decisions of one’s life, the stakes are high. He added that in the digital age, there’s no reason things cannot be done expeditiously.
“Send out an e-blast to all agents that the current price has changed with the latest bid,” he said. “It might take a little longer to sell the house, but is it a more balanced scenario in which people bid intelligently rather than emotionally and maybe even irrationally? Absolutely.”