Most Toronto real estate brokers want to end blind auctions
Brokers and Consumers Agree Supply Transparency Needed to Manage Skyrocketing Real Estate Prices
According to a poll conducted by iPro Realty, nearly 90% of brokers and consumers in the Toronto real estate market support an end to blind auctions.
The survey results echo the frustration NOW has reported in recent months, particularly among buyers priced out of the Toronto real estate market, where the average single-family home sells for $1.7 million.
In the current multiple offer scenarios in Ontario, only the seller and the listing agent know what is being offered by potential buyers competing for the same property. Sharing such information is prohibited by law.
During a real estate roundtable, experts told NOW how eager buyers tend to significantly overpay in blind bidding scenarios, driven by desperation to land the property and the ignorance of what others are willing to pay.
“They’re paying way too much,” said Meray Mansour, RE/MAX Hallmark Realty broker. “And I’m talking between fifty and a hundred thousand dollars.”
Mansour added that real estate practices where brokers deliberately list properties 30-50% below their known value should also be limited in the Toronto market and beyond. Take, for example, this house in Leslieville listed at $1.1 million when the average sale price of a single-family home in Toronto is $1.7 million.
Such practices spark passionate blind bidding wars and fuel a false narrative that homes sell for 50% more than they are worth, suggesting buyers should be ready and willing to overspend. “All of a sudden the public perception is ‘wow, the market is so crazy,'” Mansour said.
“With the Ontario government reviewing our current real estate legislation, now is the time for real estate agents to be bold and provide feedback,” iPro broker and managing partner Philip Kocev said in a statement. communicated. “We can help ensure that as many people as possible realize their dreams of home ownership and are protected in the process of achieving it.”
The survey conducted by iPro interviewed 1000 real estate agents and 165 consumers. Eighty-eight percent of consumers said offer transparency should be allowed, while 72% said it should be mandatory. Eighty-three percent of real estate agents said offer transparency should be allowed, and 64% said it should be mandatory. Forty-one percent of real estate agents believe offering transparency can help cool Toronto’s overpriced real estate market, which is currently fueled by low interest rates and supply and a growing population. Economists at major Canadian banks have also recommended ending blind auctions to moderate Toronto real estate prices.
“We believe buyers and sellers should be able to choose whether they want to use the traditional bidding process or an auction,” Ontario Real Estate Association (OREA) CEO Tim Hudak said in a statement. press release published in May. “Potential buyers may not want to share some of their most personal and private information, such as whether they need to sell their own home to finance the purchase of another or how much they can afford for a down payment with a group of strangers around the table. The government should not force them to do so.
But given the choice, sellers, not buyers, are more likely to choose to stick with the blind bidding process, hoping to drive up the price of the transaction.
Ontario NDP Housing Critic Jessica Bell believes there are ways to introduce transparency of supply while managing privacy concerns.
“It’s entirely possible to come up with regulations that protect people’s privacy,” Bell told NOW during the aforementioned real estate roundtable. “It’s an obstacle that can be easily overcome.”