Real estate investors brace yourselves: your competition for Toronto properties just got tougher, with real indication buyers are increasingly OK with bidding wars.
One of Toronto’s most successful Realtors is supporting the registrar of the Real Estate Council of Ontario (RECO) in arguing homebuyers are taking the all-but-ubiquitous bidding wars in stride.
“Multiple representation makes up a very small percentage of our complaints,” registrar Joseph Richer told the Globe and Mail. “We’re not getting consumer complaints or registrant complaints about the actual conduct.”
Richer said the market is running smoothly, judging by the complaints that the not-for-profit corporation receives. He said he doesn’t know of any clients disgruntled by bidding contests.
One Toronto area Realtor agrees, adding that it would be difficult to regulate such things as how much a seller wants to list their house for.
“I don’t believe you can regulate that,” Realtor Elli Davis tells CREW. “I think the more acceptable way would be to ask approximately five to 10 per cent lower than what you believe is the market value, and no one knows the market value until you go the market.”
When it comes to holding off on offers, however, Davis says the practice gives prospective buyers the opportunity to visit the house and weigh its affordability.
“I think the whole process of setting a date for offers is not only to create a bidding war,” she says. “It is to allow the property to have some time to be exposed to the buyers who might want to see it.
“The process – setting a date for offers – is good in that it ensures the seller will maximize their return.”
But, just holding offers will not ensure multiple bids.
“Not every home, even when you set a date for offers, will go into a bidding war,” Davis says. “The price must be more on target [with the prospective market value] than below.”
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