Blind bidding has given way for the market to rise at an unprecedented rate. New regulations in Ontario are to offer alternatives to blind bidding. With new regulations in effect next year, the home buying process can become more transparent. Just for reference, XLR8 has been offering Open and Transparent Real Estate Auctions since 2018 and our team has been involved in Real Estate Auctions since the early 1980s in various forms, from live auctions to early versions of online bidding in the 90s and 2000s with the dot com boom. Go to your Google play store or the Apple app store and seach for “XLR8 Realty” and download our latest version of our app and try it out.
Current System
These new regulations would require home sellers to disclose competing bids, giving sellers the option of “open offers.” Closed offer systems are the current norm for selling properties. This means that other potential home buyers do not know what the highest bid is currently sitting at when introducing their own bids on a property. They could be overbidding by thousands of dollars without even knowing it, therefore driving up property prices. Under the current system in place, potential homebuyers submit their offers without knowing the prices of competing bids. Real estate brokerages can disclose the number of bids, but not what is in those bids. For example, a house is listed at $500,000. Your maximum budget could be 600,000, so you go all-in on your bid. You win and purchase the house. However, the bid under yours could have only been $540,000. Therefore, you have overbid by over $50,000.
New Regulation Changes
With new regulations, sellers would have the option to have an open bidding process. Brokerages representing the sellers could reveal the competing bids if the sellers are open to this process. Some real estate representatives argue that blind bids should either be the only method allowed or be banned completely. This comes with the belief that if there is an option between the two types of bidding, blind bidding will always win. A Toronto agent states that giving sellers the option will only cause more confusion.
The leader of the Green Party in Ontario, Mike Shreiner, argues that blind bidding should not be left at the discretion of the seller. These regulations are not going to end blind bidding properly. If blind bidding is on the market, it cannot end. It will always be in the sellers’ best interest to keep buyers in the dark. A transparent bidding process, along with expanding zoning and investing in affordable rentals are the only ways to bring skyrocketing prices down.
These regulations that are to offer alternatives to blind bidding are set to begin on April 1, 2023.
For full article visit Yahoo Finance at Ontario real estate regulations to offer alternative to blind bidding (yahoo.com).
For all things real estate, as well as up-to-date listings visit XLR8 Realty.
