It has been several years since the Real Estate and Business Brokerage Act has seen any major changes, and changes need to happen. The Ontario government is starting to gather information and get opinions related to the rules Realtors® use in many aspects of our business. And this affects you!
Most of us are aware of the multiple offer situation – where a seller is presented with two or more offers of purchase and sale agreements at the same time. Well, there seems to be a lot of conversation around this process! How much information about the other offers received should be disclosed to the buyers? Should everyone know all the details of all the offers? Should things stay the same with the seller and their representative as the only ones to see all the details? Well, let’s take a closer look at both sides.
In January, 2019, there were 318 sales in Whitby, Oshawa and Clarington based on statistics of detached, semi-detached and freehold townhomes posted on the TREB MLS system. 72 of those had a sale price at or above the listing price which is a good indication that more than one offer came in at the time of sale. Currently, the rules state that the seller’s realtor needs to let each buyer who is also bringing an offer, how many offers have been received. The seller’s agent needs to only disclose the number of offers, if the offer is from their own buyer, a buyer from their brokerage or if the other offer(s) are from another, co-operating brokerage. Occasionally they will tell each salesperson who the other Realtors® are who are bringing offers on behalf of their clients.
Once everyone knows every detail about the offer, we may not see such high purchase prices with houses that are desirable. Buyers could come in at or under list price and just see what everyone else is doing with their offers. Sellers would still have multiple offers but may not receive an offer that goes far and above all others. A benefit to buyers but a detriment to sellers.
It’s possible there will be options when changes come. Perhaps the seller can state they will not divulge terms of other offers. Perhaps buyers can state they don’t want their offer details known to anyone but the seller and the seller’s realtor.
So many questions. So many unknowns! Though unknowns are common in real estate. What I do know is this review is welcome and long overdue. Discussion, change, updating, these are great things that can only strengthen an industry that must be built on trust and strong ethics.