The Ontario government is planning to introduce new policies that would let home sellers disclose information about competing purchase offers on their home.
According to reporting from The Canadian Press, the provincial government says that home sellers will soon get to choose if they want to “opt for an open offer process,” and share bids on their property. For home buyers, this would allow them to see information about other offers if the seller and other parties consent to it.
Traditionally, Canadian homes have been bought through a blind bidding process, where fellow buyers are not aware of the specific details of competing purchase offers on the same property.
“Sellers will no longer be limited to selling their property through a closed or traditional offer system,” said Ontario’s Minister of Government and Consumer Affairs, Ross Romano, in a statement.
Tim Hudak, CEO of the Ontario Real Estate Association (OREA), stated in a press release that he was pleased about the latest reforms.
“These changes were part of a package of reforms the Ontario Real Estate Association (OREA) worked closely with the Province to bring forward, which strike the right balance between adding more transparency to the offer process and protecting a homeowner’s right to sell their home how they want, instead of blanket bans on the traditional offer process,” said Hudak.
Buying a home is one of the biggest purchases a person will make & our government is ensuring Ontarians will be able to make this milestone investment.⁰
With these new protections, hard-working Ontarians can rest assured knowing that we have their backs!https://t.co/1irSZyZStu— Ross Romano (@RossRomanoSSM) April 20, 2022
The offer changes are one part of an overhaul to the Trust in Real Estate Services Act, which includes a new code of ethics for real estate agents and enhanced powers for the Real Estate Council of Ontario (RECO) to go after bad actors. The new regulations are set to take effect on April 1st, 2023.
“Ontario realtors want to see North American-leading professionalism in the industry. It’s too easy to get into the business and too hard to get kicked out,” said Hudak. “These changes will give RECO extra powers to throw the book at agents who are violating consumer trust.”
The conversation around ending blind bidding has been occurring at the national level for some time.
During the 2021 federal election, Prime Minister Justin Trudeau’s Liberal party campaigned on the creation of a Home Buyers’ Bill of Rights that would ban blind bidding and introduce other consumer protections. In the recent 2022 budget, it was confirmed that the Minister of Housing and Diversity and Inclusion would engage with provinces and territories over the next year to create the bill.
In a paper published in November 2021, the Smart Prosperity Institute explored whether an end to blind bidding on homes would slow the growth of prices. The think tank concluded in its findings that closed bidding “does not ultimately drive up home prices, and requiring open bidding in a hot real-estate may lead to higher, rather than lower, home prices.”
