Depending on which side of a real estate transaction you’re on, bidding wars can be often frustrating and stressful for the buyers, and on the other hand, very profitable for the sellers.
Multiple offer situations can be a symptom of a hot real estate market. Toronto and the GTA have been among the hottest markets in the country for over a decade, and Markham, including Unionville and Thornhill, are among the hottest in York Region.
For listing agents and sellers, a bidding war can drive up the selling price of a home well above the asking price, and even above the current value of homes in the area. This can result in buyers, anxious to take advantage of historically low mortgage rates, stretching their budgets beyond their comfort zones when facing multiple offer situations for the home they want.
Bidding wars have become so common that many people wonder if unethical practices are used to drive up the selling price. Starting July 1, 2015 there are some new rules that are being put into place:
1. Listing agents will be required to keep written records of all offers (both successful and unsuccessful) for a minimum of one year.
2. They must have a formal offer in writing before they can report it as a registered offer. This means no “verbal” offers!
These changes are intended to ensure the offer process is transparent. It’s important to remember that real estate professionals are bound by a strict set of rules, and the vast majority of them strive to present fairness. These new rules mean that all offers are legitimate and accounted for, and can provide both buyers and sellers peace of mind.