Questioning Competing Offers and New Legislation
In 2015, a tight inventory of listings resulted in many multiple offer situations, a market condition that, barring any unforeseeable events, will likely continue into the New Year.
Buying a home can be stressful at the best of times. Yet competing offers can add to the anxiety. When bona fide buyers lose out they are understandably disappointed.
This can happen for various reasons, such as:
- They have competed against other offers more than once and each time another buyer has won out based on better price, closing date, terms and conditions or some other factor.
- They haven’t made their best offer and instruct their salesperson to suggest a counter offer back. Yet the seller in most instances will accept or deal with the best offer in price and terms. Occasionally the seller will ask that each buyer resubmit and improve their offers before deciding which offer to deal with or accept.
Others reasons though may cause suspicion, such as:
- They believe their offer was mishandled and were treated unfairly, surmising another buyer was given preferential treatment.
- They might question whether their offer was even presented, an event that is easily solvable.
- They question how many offers they were competing against.
- If they win the deal, they question if they really were in competition.
The process must be fair and transparent
It’s important, therefore, that handling offers is and “appears to be fair, ethical, open and transparent,” according to RECO, the licensing regulator. It also goes without saying that most REALTORS® work within right principles of doing business and follow the Code of Ethics as governed by RECO. While working to represent their clients’ best interests, they must and do treat others in a transaction fairly, ethically and with integrity. So the last four points above are rare occurrences.
Amendments to the Real Estate and Business Brokers Act.
In 2015 the Real Estate and Business Brokers Act in Ontario was amended to say that only written offers can be treated as competing offers. The listing brokerage must further confirm that any offer received is in writing and must save unaccepted offers on a listing for one year.
Now if someone questions whether they were in competition and against how many other offers, RECO can contact the listing brokerage, confirm the number of offers and report back.
Enquiries since July 1st, 2015
On or about November 11, 2015, RECO reported that they had received 19 enquiries as of July 1st, the mandatory date for keeping unaccepted offers in compliance with the amendment. 12 were from consumers who won the property and enquired as to how many offers. The other 7 were from people who did not win out. A few, even of those who won the offer wanted to know what the other offers were and how much they paid over the next best offer. RECO can only inform as to the number offers and nothing more.