3 THING YOU NEED TO KNOW ABOUT OPEN BIDDING IN ONTARIO REAL ESTATE

Dated: February 5 2024

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The Ontario Government legislation, amending laws that have guided real estate professionals for over 20 years, went into effect at the end of 2023. Changes broadly included improvements to broker and brokerage disclosures, ways to avoid conflict on multiple representation, and the option for sellers to have an open bidding process – something real estate professionals in Ontario were previously prohibited from engaging in. Let’s take a closer look at what the open bidding process means for Ontario property owners.

What is open bidding in real estate?

Open bidding gives property Sellers the choice to reveal only the most attractive parts of offers received, such as price, while suppressing less desirable elements such as unfavourable conditions in hopes of securing the best possible sale terms. 

What does opening bidding mean for Buyers and Sellers?

As this option has only just been approved, it’s hard to know all of the implications for Buyers and Sellers. But you can expect;

  1. Buyers who have made an offer on a property are entitled to know the number of offers they are competing with. 
  2. Sellers choose how much other information, if any, they want to share about each of the offers they receive. 
  3. Sellers are not required to share  information about the content of offers received, and Realtors working for Sellers are not permitted to share the content of offers unless their Seller directs them to. 

As a Seller:

You decide how much information you want to share about the competing offers you have received. For example, you may decide to reveal only the price and not  conditions that could include sale of the buyers property, long closing or planning permission to rebuild. 

Your Realtor will counsel you on points that will impact your decision on what, if anything to reveal, including but not limited to your property features, market conditions, and the content of all the offers you receive.

Clear written direction to your Realtor is required before the content of any offers can be shared with Buyers.

Personal identifying information within an offer may not be shared at any time.

As a Buyer: 

You are entitled to know how many offers are competing with yours. This may change quickly at any moment. Only offers that are signed may be counted as offers –anything else is considered only an expression of interest.

You decide whether you wish to engage in a process where the content of your offer might be shared with other Buyers. 

Your Realtor will advise the steps you should take to avoid having the content of your offer shared with other Buyers. For example, a clause may be crafted wherein your offer becomes null and void if the contents are shared. But this option is not clear cut - so you will need your Realtor to guide you here. 

Remember the Seller can make the decision to share or not share the content or partial content of offers at any time. They may change their mind. You may not know in advance. And finally, while you may know which parts of the offers have been shared - you may not know which parts have not been revealed. 

To find out more about how an open bidding strategy impacts your particular situation contact Mark or Susan. ( susan@markbenson.ca)

Resources:

RECO (read more)

OREA (read more)

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Susan Benson

Put competent experience to work for your Muskoka and Ontario Cottage Country real estate investments with Susan & Mark Benson. Susan is a graduate of Havergal College and Queen's University and brin....

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