PHANTOM REAL ESTATE BIDS ARE A THING OF THE PAST!
You are in a bidding war and the Listing Agent says you better bring your very best Offer because you are in competition, but something doesn’t feel right. Is there another Offer and how can we know for sure?
Well, starting July 1st, 2015, RECO (The Real Estate Council of Ontario) the ruling body responsible for regulating the Real Estate industry on behalf of the Ontario Government, has made it law in Ontario, that All Offers must be recorded by the Listing Broker if there is more than one Offer bidding for a Property.
During this Fast-paced Toronto Real Estate Market, many unscrupulous Real Estate Agents emerged using ‘Phantom’ Offers to drive up Prices on Listed Homes that were being bid on. Those Agents often hinted at receiving competing Offers to entice Potential Buyers into raising their Offers or rushing into a deal. This not only drove the Homebuyers to emotional heights, but also made Great Buyer (Co-Operating) Agents crazy with not knowing if the Listing Agent really even had other Offers. It was a clear disadvantage.
This has happened to me personally representing a Potential Buyer. When I spoke with the Listing Agent and asked who the other Offers were from and how many there were, there was nothing in place to having to confirm those Offers were actually Registered (which really means signed by the Buyer) and/or Received. Rest assured, High End Brokerages, like the one I work for, would not tolerate such shady behavior from their Agents.
So, moving forward in this Red-Hot Toronto Real Estate Market, Agents can no longer ‘imply’ they have received an Offer unless it is in writing and has been Signed. All received Offers must be recorded and kept on file, a practice I have done since I started in Real Estate over 26 Years ago!
Thinking of buying Real Estate in Toronto, I am here to help you!