Ontario to Outlaw Phantom Real Estate Bids
Starting July 1, 2015, real estate professionals in Ontario will not be allowed to imply that they have received an offer to purchase unless the offer is in writing and has been signed. The new rules, which have been established by the Liberal government and the Real Estate Council of Ontario (RECO), are designed to eliminate the possibility of phantom bids in multiple offer situations.
It will no longer be open to agents to try to drive up the sale price by saying that they have, or are expecting, another offer that in reality does not exist.
Although the existing rules already indicate that for an offer to be valid it must be signed, the new rules require agents to keep records of the offer. If a potential buyer wishes to confirm that there are multiple offers they can take their request to RECO and the listing agent will be required to show proof of the other offers, however the details of other bids (e.g. the offer price) will not be revealed to other potential purchasers.
Brokers who violate the new rules could face a fine of up to $50,000 and up to two years imprisonment. Agents who violate the new rules could be referred to a disciplinary committee and be ordered to take educational courses and pay up to $25,000 in fines.
This proposal does not achieve the desired result. It still leaves the purchaser’s agent in a position to say there are multiple offers without any repercussions.
Also, by not disclosing the price bid or other details, how can anyone be certain of the bona fides of the offer? This system has big enough holes to drive a truck through.
Boycott and refuse to participate under such circumstances. I have not read the listing agreement or the MLS agreement. You may consider offering full price (asking offer). If it is not accepted, file a complaint with ministry consumers for false advertising, and sue for breach of contract. The listng agreement is not an auction agreement. Auction the product is presented requesting an offer for consideration which sets the bid war in motion, It just very well may be that, in the real estate transaction they listed the property for a price they wanted to obtain. Once its obtained in full a meeting of the minds is created. In other words a contract.