No More Bidding Wars: How Do the New changes to Ontario Real Estate Legislation Affect Home Buyers?
In an attempt to cool down the housing market, new changes to regulations governing Ontario real estate will take place next year. This takes place in the introduction of a proposed “Home Buyer’s Bill of Rights”— legislation designed to protect the home buyer.
The most interesting change written into the new legislation is the plan to curb blind bidding – which has been identified as one of the factors keeping housing prices out of reach.
Under the current system of blind bidding, potential homebuyers submit their offers but do not know the contents of competing bids. The law states that real estate brokerages who represent clients must disclose the number of written bids but not the amount of those bids.
Does the new legislation make blind bidding illegal? Not really. Under the new laws, property sellers will have the option to open the bidding process and make all offers transparent, instead of participating in the blind bidding process. That means the brokerages who represent them would disclose details of competing bids at the discretion of sellers. In other words, open bidding is not mandatory – but at the discretion of the home buyer.
How does this affect the prospective home buyer? Well… it depends on who the buyer is buying from. Since the home seller still has the option to enable blind bidding, the new legislation may do little to prevent you from being priced out.
Other notable propositions in the Bill of Rights include: ensuring that all banks and mortgage lenders offer mortgage deferrals for up to six months in the event of a major life event (such as a job loss). Also, lenders would also be required to act in a buyer’s best interest by fully informing them of the full range of choices available to them, including the First-Time Home Buyer Incentive.
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