COMMUNITY COLUMNIST: New real estate rules help alleviate ‘phantom bid’ worries

Opinion Jun 09, 2015 by Jeff Bonner Hamilton Mountain News

If you’ve ever bought a house in a competing offers situation – bidding war, in the common vernacular – you know the frustration of the blind bidding process.

Not just putting together an offer, but then the stress of deciding whether to stay put or increase the price every time a new offer comes in.  

To make it worse, there is always the concern that there may be “phantom bids” on the table, a term for when a seller’s real estate representative suggests there are competing offers that don’t exist.

After all, how do you know how many offers actually get to the table?

There was a time when one could simply count the number of agents at an offer presentation to know how many offers there should be. But between an increase in out-of-town buyers and technology changing business practices, many offers get faxed or emailed without an agent being physically present, even in competition. Putting aside any conversation about the merits of an agent physically coming with the offer, this makes it an unreliable way to verify competing offers.

Although I think the frequency of phantom bids is actually quite low, the simple fact that it is possible and there is no way for buyers to verify the existence of offers has caused the Real Estate Council of Ontario (RECO) to bring in new rules to provide assurance to buyers, effective July 1.

First, although it has always been considered unethical to mislead consumers, they have made it quite explicit that a listing representative cannot indicate they have an offer unless it is in writing and signed.

Second, and much more significant to buyers and their representatives, sellers’ brokerages must now retain records of all offers received, including the ones that are not accepted.

Buyers and their representatives, as well as sellers, will be able to contact RECO and ask them to verify the number offers received. Details of the individual offers will remain confidential, but this will give some peace of mind to buyers who are concerned they might have offered more in a bidding war when there actually was no other offer.

In the end, multiple offer situations will be much the same, with buyers still bidding blind.

But at least there will be an added level of records-keeping and oversight to help prevent any “phantom bids” from tainting the process.  

Jeff Bonner is a sales representative with City Brokerage.

If you would like to write in this space, call editor Gord Bowes at 905-664-8800 ext. 335.

COMMUNITY COLUMNIST: New real estate rules help alleviate ‘phantom bid’ worries

Real Estate Council of Ontario bringing in new rules to provide assurance to buyers, effective July 1

Opinion Jun 09, 2015 by Jeff Bonner Hamilton Mountain News

If you’ve ever bought a house in a competing offers situation – bidding war, in the common vernacular – you know the frustration of the blind bidding process.

Not just putting together an offer, but then the stress of deciding whether to stay put or increase the price every time a new offer comes in.  

To make it worse, there is always the concern that there may be “phantom bids” on the table, a term for when a seller’s real estate representative suggests there are competing offers that don’t exist.

After all, how do you know how many offers actually get to the table?

Although it has always been considered unethical to mislead consumers, they have made it quite explicit that a listing representative cannot indicate they have an offer unless it is in writing and signed.

There was a time when one could simply count the number of agents at an offer presentation to know how many offers there should be. But between an increase in out-of-town buyers and technology changing business practices, many offers get faxed or emailed without an agent being physically present, even in competition. Putting aside any conversation about the merits of an agent physically coming with the offer, this makes it an unreliable way to verify competing offers.

Although I think the frequency of phantom bids is actually quite low, the simple fact that it is possible and there is no way for buyers to verify the existence of offers has caused the Real Estate Council of Ontario (RECO) to bring in new rules to provide assurance to buyers, effective July 1.

First, although it has always been considered unethical to mislead consumers, they have made it quite explicit that a listing representative cannot indicate they have an offer unless it is in writing and signed.

Second, and much more significant to buyers and their representatives, sellers’ brokerages must now retain records of all offers received, including the ones that are not accepted.

Buyers and their representatives, as well as sellers, will be able to contact RECO and ask them to verify the number offers received. Details of the individual offers will remain confidential, but this will give some peace of mind to buyers who are concerned they might have offered more in a bidding war when there actually was no other offer.

In the end, multiple offer situations will be much the same, with buyers still bidding blind.

But at least there will be an added level of records-keeping and oversight to help prevent any “phantom bids” from tainting the process.  

Jeff Bonner is a sales representative with City Brokerage.

If you would like to write in this space, call editor Gord Bowes at 905-664-8800 ext. 335.

COMMUNITY COLUMNIST: New real estate rules help alleviate ‘phantom bid’ worries

Real Estate Council of Ontario bringing in new rules to provide assurance to buyers, effective July 1

Opinion Jun 09, 2015 by Jeff Bonner Hamilton Mountain News

If you’ve ever bought a house in a competing offers situation – bidding war, in the common vernacular – you know the frustration of the blind bidding process.

Not just putting together an offer, but then the stress of deciding whether to stay put or increase the price every time a new offer comes in.  

To make it worse, there is always the concern that there may be “phantom bids” on the table, a term for when a seller’s real estate representative suggests there are competing offers that don’t exist.

After all, how do you know how many offers actually get to the table?

Although it has always been considered unethical to mislead consumers, they have made it quite explicit that a listing representative cannot indicate they have an offer unless it is in writing and signed.

There was a time when one could simply count the number of agents at an offer presentation to know how many offers there should be. But between an increase in out-of-town buyers and technology changing business practices, many offers get faxed or emailed without an agent being physically present, even in competition. Putting aside any conversation about the merits of an agent physically coming with the offer, this makes it an unreliable way to verify competing offers.

Although I think the frequency of phantom bids is actually quite low, the simple fact that it is possible and there is no way for buyers to verify the existence of offers has caused the Real Estate Council of Ontario (RECO) to bring in new rules to provide assurance to buyers, effective July 1.

First, although it has always been considered unethical to mislead consumers, they have made it quite explicit that a listing representative cannot indicate they have an offer unless it is in writing and signed.

Second, and much more significant to buyers and their representatives, sellers’ brokerages must now retain records of all offers received, including the ones that are not accepted.

Buyers and their representatives, as well as sellers, will be able to contact RECO and ask them to verify the number offers received. Details of the individual offers will remain confidential, but this will give some peace of mind to buyers who are concerned they might have offered more in a bidding war when there actually was no other offer.

In the end, multiple offer situations will be much the same, with buyers still bidding blind.

But at least there will be an added level of records-keeping and oversight to help prevent any “phantom bids” from tainting the process.  

Jeff Bonner is a sales representative with City Brokerage.

If you would like to write in this space, call editor Gord Bowes at 905-664-8800 ext. 335.