Under the current blind bidding system, potential buyers submit offers without knowing the contents of competing offers. The seller’s agent must disclose the number of offers received to all other parties who have submitted an offer, but none of the details – whether price or conditions.
The new regulations coming into effect April 1, 2023 would allow sellers the option of an open bidding process. Blind bidding will still be allowed, but it will depend on what the seller wants. Should they chose to opt for open bidding, the brokerages who represent them would disclose details of competing offers.
The Ontario government says these new regulations will help to make the home buying process more transparent, bringing down the rapidly inflating cost of homes. Blind bidding does create an opportunity for sellers to drive up prices by signing back offers for a higher price, with the potential buyer left guessing how much (if any) improvement would actually be needed to beat out the other offers on the table. With that said, it’s hard to see why the majority of sellers would chose to have open bidding with blind bidding still an option.
If this new open bidding process proves to be a popular option, it may increase trust between buyers and their agents – there seems to be a common misconception that agents are the driving force behind not disclosing the details of other offers, when in reality it is the current law. A more transparent process would ease that mistrust – as well as the huge amount of fatigue buyers are feeling in the current market.
I personally don’t think this move will change much – blind bidding benefits sellers, not buyers – so putting the choice in the hands of the seller seems to point to an obvious outcome.
There will be other changes to the Trust in Real Estate Services Act (TRESA) coming into effect in April 2023 as well: simpler standardized forms, and more disciplinary powers to the Real Estate Council of Ontario (RECO), the body in charge of enforcing rules for real estate salespeople and brokers.