Before we go into some new “rules” in the real estate industry, here’s a quick recap of the market as I write this article near the end of November.
Home sales activity was on track to be the lowest we have seen this year as we close out November. In fact, the lowest we have seen since the Covid days.
December will not be any better. Unsold inventory levels remain high. A challenging market for sure – and one where in many cases you may need to price your home under market value to create enough interest to get it sold.
At this point, I will be waiting to see what January brings before I start recommending most new sellers to list (Of course, I understand some may have to list sooner).
Until then, I will be analyzing the incoming economic data closely to pick up on early trends and any change in sentiment out there. I will talk more about the market and selling strategies moving forward in my January 2024 article.
A number of procedures changed for realtors as of December 1st, and this month I’m going to talk about the change from what is referred to as “closed or blind bidding” to “open bidding” when it comes to multiple bids/offers on a home.
This is a change the government was pushing for and had their hand in – and in my opinion, they totally botched it. And the fact these new rules are kicking in right now is very ironic since multiple bids are certainly not an issue in the current market.
In the past, when there were multiple offers, buyers did not get to know any of the details of the other offers. Hence the term “blind bidding”. There are those who believe this process is unfair to buyers and leads to overpaying.
I understand the concerns and the way our current industry works does need improvement; but simply changing a few “rules” won’t fix the problem.
To be brutally honest, a lot of buyers have overpaid because of realtors they work with not knowing the local market and/or coming up short on the ethics side of things. (Now, before I get hate mail, there are a lot of good realtors out there too.)
But inexperience, realtors working outside their market area, lack of training/knowledge, and realtors failing on their fiduciary duties to buyers – intentional or not – is a big issue.
Perhaps the current market slowdown will encourage some to leave the industry. If a realtor is only involved in buying or selling 2 – 3 or so homes a year, they cannot possibly be providing the level of expertise required in today’s market.
And when it comes to ethics – well, you cannot easily legislate ethics. Who you hire matters. Get good, qualified advice.
Sorry, I got off on a little tangent there. The new ” open bidding ” rules allow buyers to know about the content of other offers – BUT ONLY IF THE SELLER SO ELECTS. FURTHER… and this is where I think things really fall off the rails… the seller can direct their realtor to only advise SELECT CONTENT of the other offers.
For example, let’s say there are 3 offers: one is $800,000 with multiple conditions (say, sale of buyer property, inspection & financing) and the other two offers are FIRM (no conditions), for $795,000 and $790,000.
The seller can instruct their realtor to tell the two firm offers that the highest offer is $800,000, with the obvious intent to get the two firm offers to go higher. The seller can also legally tell the realtor NOT to advise the two firm offers that the $800,000 offer has multiple conditions (thus really not comparable to the firm offers).
So – partially transparent – but not really. Possibly misleading in fact? Maybe even WORSE than blind bidding?
If the government wanted a transparent process that was fairer to the buyer – they have failed miserably. And remember – the seller can still elect NOT to give any info to buyers.
In other words, there is much ado about nothing here. I expect most sellers will elect to stick with the “blind bidding” process. And just like there are certain realtors who manipulate the blind bidding process, those same realtors will also misuse the new open bidding process to the detriment of the buyer.
I believe a good realtor can get the best result for their seller AND be fair to all parties. These two things don’t need to be mutually exclusive.
As I close out 2023, I would like to thank all my clients, my partner Erica Voisin and our support team for allowing me to be Centre Wellington’s # 1 Listing Realtor again in 2023. 5 years in a row!
Along with Erica, it will be my goal to continue to build our top performing team and provide the best service possible to our existing and new clients in 2024.
Wishing everyone a Merry Christmas & Happy New Year!
Until next month, take care.
George
