After asking for more transparency in real estate transactions for years, the government may soon give people what they want. The Ontario government is looking to modernize the Real Estate and Business Brokers Act (REEBA).
Currently, the seller’s real estate broker is only required to reveal the number of other offers. The details of the offer, such as the bidding amount, do not need to be shared. With these details hidden, buyers are often misled into inflating offers in order to outbid competitors. This creates a bidding war, ultimately resulting in higher prices and overinflated markets.
It’s been over 20 years since the REEBA has been reviewed. With real estate prices rising, it’s not surprising that the government now wants to review the rules.
“We need to make sure the rules governing real estate professionals, and the brokerages that employ them, are efficient, fair and up-to-date with modern realities,” said Mister Bill Walker. “This review is part of our government’s plan to strengthen consumer protection, increase transparency and make life better for the people of Ontario.”
The government is turning to the public for help in reviewing REEBA. They’re seeking feedback on changes regarding regulating competing bids as well as the act’s code of ethics and education standards for real estate brokers and agents. Ontario residents can provide feedback by completing an online survey by March 15th, 2019.
It’s not just the public begging for more transparency in real estate. The Ontario Real Estate Association (OREA) has offered up more than three-dozen recommendations in how to update the act, including open bidding.
Toronto’s real estate market is red hot and has been for the past few years. With limited availability bidding wars are commonplace. Buyers are desperate to not miss out, which causes them to overbid, increasing home prices to unsustainable levels. Open bidding would allow all parties to put everything out in the open if they chose. Information such as offer prices, closing dates, and conditions could be disclosed.
This wouldn’t just benefit the buyers either. Sellers would be able to gain more information and leverage better deals, not just in terms of price. Overall, it would be a more transparent and fair process, which everyone wants.
Hopefully, the Ontario government will soon implement changes that bring the province’s real estate act into this year. Updates and modernization are important to a sustainable real estate market. Feel free to contact us to learn more about Toronto real estate!