Home buying and selling is about to get more transparent, with proposed changes to blind bids.
Reforms to Trust in Real Estate Services Act will give sellers the option of revealing competing buyer’s prices in multiple bid scenarios.
That’s stellar, since the province’s real estate bidding process has been fractured by high pressure, closed door stakes that left buyers in the dark.
What to include in the offer to purchase.
Two Types of Bids in Ontario
Changes proposed April 1, 2023 lift the veil of secrecy. Ontario will allow two types of bids after that date, blind bids and an open offer process.
How Blind Bids Work in Ontario
Forcing buyers to compete without the benefit of knowing anything other than how many bids a seller has made blind bidding in Ontario unpopular. Realtors must disclose:
- the number of offers made, before a buyer presents theirs
- If they are representing both a buyer and seller
- if they or any realtor reduces their commission
- and any changes to the bidding process.
Revealing prices is currently illegal. Short of canvassing neighbourhood comps (comparative prices), that makes it tricky to gauge if an offer is in the ballpark, or the buyer is being gouged.
Firm offer pros and cons for Ontario buyers.
Open Offer System Helps Buyers
Open offers will give buyers details of other bidders’ offers, with buyer and seller consent. Sellers can still opt for blind bids, but the more transparent open offer system gives buyers a better sense if they can afford to bid, and more to work with if they’re asked to improve their offer.
Do You Lose Your Deposit —
if finance falls through on a blind bid offer? Not necessarily. Read buyer’s right to cancel if you’re mulling over putting in an offer.
Blind Bidding System Legal But Disliked
The widely disliked blind bidding system is legal in Canada and Ontario, but could be short lived.
The federal Liberals have vowed to ban blind bidding in a Home Buyers’ Bill of Rights. The bill, if adopted, would curb “unfair practices that drive up the price of housing,” a 2021 Liberal election pledge.
Find your CMHC debt service ratio.
Ottawa’s April 2022 budget promises to draw provinces and territories into a national plan to end blind bidding. Ontario’s announcement jumps the gun, taking some of the heat out of a hard charging seller’s market.
Houses caught up in blind bidding battles are there for a reason. Short supply, low interest rates, and high demand from immigration and speculation have kept buyers competing for anything that remotely fits their budget.
That could turn around with the Bank of Canada’s determination to fight inflation by hiking interest rates.
Putting a Blind Offer on a House
Blind bidding isn’t the only practice that has conservative lenders tense. Blind offers take all the due out of diligence by putting a bid on a property sight unseen. For buyers with big pockets or low expectations, it can make buying fast and furious.
Placing firm offers on real estate buyers haven’t toured, or only looked at online, is risky. Buyers determined to put a blind offer on a house can go directly to a realtor’s office to submit an unconditional agreement of purchase and sale. (Axess Law recommends independent legal advice before completion date.)
Dangers of making a firm offer on multiple homes.
Avoiding Bidding Wars and Blind Bidding
How do you avoid a bidding war when buying a house? The obvious answer is you don’t, if that’s how the deal is going. Better still, choose not to bid on houses with multiple offers, and deliberately undervalued properties. Ask your real estate agent to weed those out when they forward MLS properties that meet your home search criteria.
Why You Need a Real Estate Lawyer
Axess Law’s licensed real estate lawyers walk buyers or sellers through blind bid or open offer agreements of purchase and sale. Our experienced attorneys see through the fine print to find terms and conditions that could make a purchase or sale more difficult to cancel.
What a real estate lawyer does.
Whether you’re buying or selling a home or land, Axess Law can review draft or signed offers to purchase. We tell you if essential clauses are missing, and what the agreement commits you to timewise.
Do you get the deposit back if a house sale falls through?
Financing can take time to negotiate. Axess Law reviews the financial clauses in your contract to determine your buyer or seller rights. We negotiate with the other party’s lawyer if a buyer needs more time to get a mortgage loan, or arrange to cancel the contract if financing falls through.
Axess Law liaises with your lender to discharge existing mortgages, and finalize legal documents needed for your new loan. Our efficient legal team searches title to the property for legal claims or other obstacles like construction liens that need removing before we can transfer title to the new owner.
What to know about mortgage discharge in Ontario.
Access Lawyers Remotely By Video Conference
Close real estate transactions anywhere in Ontario with our remote real estate lawyers. Our legal professionals network with you online using any compatible home computer, laptop, tablet, or mobile device. We offer secure, confidential video conferencing services anytime you want to sign, have witnessed, or finalize an Ontario agreement of purchase and sale. We show you how to make completing your real estate deal nearly effortless.
How virtual real estate lawyer services work.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
Book Appointments 7 Days a Week
Axess Law has licensed real estate lawyers near you, 7 days a week. Make instant appointments online using our web booking form. For personal assistance, dial our toll free 1-877-402-4277 lawyer line, or 647-479-0118 in Greater Toronto Area. We help you find dates and times that fit your schedule. If you prefer, drop by any Axess Law office.
We have onsite parking, and easy transit access.