Who Is Minding Your Real Estate Wallet? Part One

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Note: The opinions and positions herein are the sole personal expressed opinion and perspective of the author and in no way represent the views of his Brokerage® or his local, provincial, or federal associations or affiliates.

In today’s climate, trust and care are important to people. Privacy and the right to exercise
capitalistic gains are as well. As we progress with social media penetrating all ways of life,
people are reminded to perform their due diligence when it comes to contracts, terms, and
conditions. Having stated that, people want two things: protection for their decisions but not at the expense of personal control or privacy.

When it comes to real estate, the Ontario government has the legislative jurisdiction over laws pertaining to trading in real estate under the Real Estate Business and Brokers Act, 2002. It is now also asking for input from the general public. It also receives input from the Real Estate Council of Ontario (RECO) which regulates the Real Estate® profession in Ontario. RECO is asking Realtors® for input as well. These two assure Ontario property buyers and sellers that there is consumer protection, fair representation, and professional conduct in real estate transactions.

Here is the main issue among many: shall a listing Realtor® representing a Brokerage® allow full disclosure of prices in real estate bidding wars, otherwise known as multiple offers? Pertaining to multiple offers on a property, dual or multiple representation is often associated thereby complicating matters at the negotiating table. On July 26, 2017, after a CBC Marketplace episode, Rui Alves wrote a column titled “A Fresh, Bold Perspective on Multiple Representation Rules”.[1] It is an interesting read and would help in your input to this proposed legislation. You may also consider “Wrong Take on Multiple Representation” by Philip Kocey.[2]  Issues such as the listing brokerage having to juggle the multiple offers but the listing Agent® and Brokerage® may also be involved in multiple representation. Although both are somewhat related, the focus of this article is the full monetary offer disclosures to all buyers involved in the bidding war that some refer to as an “auction”.

Having stated this, the government of Ontario is now considering what RECO has supportedand advocated in principle recently; that is, that when a number of offers are made available to a buyer of real estate, not only should full disclosure be made as to how many offers are registered for purchase (present practice) but that the listing Brokerage® make available what the offers are in dollar value (new). The latter element is opposite to what is presently practiced: that the Brokerage shall not disclose to the Buyer the terms of any offer. This new legislation would permit the listing Brokerage to disclose the prices to all buyers.

There are 2 sides to this proposal: privacy and open disclosure. One side supports a form of privacy or privileged information between the client and his/her Realtor®. Disclosure supports the multiple buyers to ensure they are not paying more for a home than it is worth in a current fair market. Buyers and Realtors® who make decisions mainly with their “head” will support this kind of proposal of full disclosure of monetary offers and wish it could extend to other offer conditions. Also, those who decide with their “hearts” or emotions will be protected by such legislation from spending too much. Privacy and non-disclosure are the seller’s positions because these have helped sellers get the highest price for their home, sometimes above fair market value.

Reminder: The provincial government and RECO are asking for input the general public and from Realtors® on the following topic: allowing full disclosure of prices in real estate bidding wars, otherwise known as multiple offers.

See the government’s consultation paper by clicking here

Written submissions are due no later than March 15, 2019.

Regardless of your position, please exercise your right for input into this proposed legislation.

[1] Rui Alves, REM Magazine, July 26, 2017

[2] Philip Kocey, REM Magazine, Feb. 17, 2019 written in Aug. 29, 2017

 

 

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