New CREA (Canadian Real Estate Association) Pilot Program Will Let Homebuyers See All Offers in Real Time
In a first for Canada, a new pilot program from the Canadian Real Estate Association, will allow homebuyers to tract in real time all registered offers placed on a property as they’re submitted. The real-time tracking will be shown on a property’s REALTOR.ca listing, using Australian property technology company Openn Negotiation. Details on when and where the pilot will launch are not yet clear, with CREA saying that it will kick off some time this summer in select markets across the country.
Canadian property buyers and sellers seek greater confidence in the process, while Canadian realtors seek tools to enable and more easily manage these situations. The announcement came just one day before the federal government announced its intention to ban blind bidding Canada-wide in the 2022 Federal Budget, which was a 2021 campaign promise made by Prime Minister Justin Trudeau to create a “Home Buyers’ Bill of Rights”, which included the banning of blind bidding.
As rising home prices and fierce bidding wars rage on, Canada is looking to follow the lead of other countries like Australia which use an open bidding system, as a means to cool Canada’s housing market with much needed transparency.
Some have questioned the federal government’s decision to implement open bidding, with one report from policy think tank Smart Prosperity Institute stating that not only is there no evidence to support the government’s claim that blind bidding causes prices to soar, but that actual evidence from countries like New Zealand, and Australia suggests open bidding will lead to higher prices. It’s important to note, however, that all of Australia’s home sales, as well as a large portion of New Zealand’s, are carried out via a live auction.
The federal government has not yet provided any details on what exactly the blind bidding ban would entail or how it would be implemented. Currently, each province or territory have their own varied rules and regulations when it comes to open bidding.
In Ontario, for example, the Real Estate Brokers Act prohibits realtors from revealing the dollar amount of competing bids, but requires they reveal how many other offers there are. In British Columbia, on the other hand, buyers must rely on a selling agent’s
willingness to reveal how many other offers they’ve received. Despite the current rules, the Real Estate Board of Greater Vancouver is on board with the CREA pilot.
But Ontario – the country’s largest real estate market – has indicated it is not on board. Premier Doug Ford has said he supports fair competition but does not want new rules. “I am not in favour of adding new regulations,” Mr. Ford said in a video posted on the OREA (Ontario Real Estate Association’s) Twitter feed.
But this will all change for Ontario starting next year April 1st, 2023. OREA has lobbied for change and starting next year the choice of how to sell a home would continue to rest with the Seller. The Seller would be able to direct the brokerage to sell their property through either an open or a closed (traditional) process.
During last year’s real estate frenzy, some economists and even some realtors called for an end to blind bidding, saying it contributed to skyrocketing home prices. Now that borrowing has become more expensive, buyer demand has started to wane. Realtors have described homes taking longer to sell and say some are getting no offers, which used to be rare.
