Toronto realtors return fire to industry group after president said ban would criminalize families
Liberals have promised to ban blind bidding as part of its campaign platform, answering calls from representatives of the real estate industry to end practices that cause overpricing of homes in Toronto and beyond.
On its platform, the ruling party undertakes to create Home Buyers Bill of Rights ensure “fair, open and transparent” processes when buying a home. The prohibition of blind bidding is at the top of the list, along with legal home inspection rights, complete transparency when it comes to sales history, and participants and beneficiaries when it comes to transactions.
Not everyone is satisfied with this promise.
On August 24, President of the Ontario Real Estate Association (OREA) David Oikle said in a statement that the liberal plan would “criminalize the ability of hardworking Canadians to choose how to sell their homes by regulating real estate practices through the penal code … an elder or family used a traditional offering process. they would be a criminal according to the liberal plan. “
OREA, whose CEO is former Ontario PC party leader Tim Hoodak, has repeatedly downplayed the effectiveness of real estate regulations to advocate for more housing. But this time, real estate agents in Toronto and throughout Ontario are resisting the organization that is supposed to represent them.
OREA, such nonsense only reinforces the growing public opinion that real estate associations are not really interested in the public good and are just propaganda machines to pump the market – Spencer (@sbaileylegal) August 24, 2021
“I was really taken by surprise when this message went to all of our members,” says Philip Kochev, broker for iPro Realty. “I think it was wrong, overly politicized and inaccurate.”
“It was very provocative,” adds Mary Mansour, broker RE / MAX Hallmark Realty.
Kochev highlights how OREA characterizes transparent bids by drawing on Australian open auctions and portraying the process in its most caricatured extremes as a fear-mongering tactic.
“Auction rush creates a three-ring circus on front lawns, with up-and-coming buyers crowding in front of a home with a live auctioneer or online and bidding begins,” Oikle said in a statement. “Auctions not only fail to make homes more affordable, but they can drive up prices and dangerously nudge buyers into making hasty decisions that require tens of thousands of dollars in minutes.”
Kochev, whose firm has presented viable transparent bidding procedures to government and real estate agencies such as OREA, calls the announcement “irresponsible.” Despite what people think of OREA, he said, shoppers are not limited to one extreme alternative to blind bidding.
“It was a little offensive to realtors and the public,” explains Kochev. “I was particularly offended by this idea that the only option is a Wild West-style auction, and that everyone’s privacy suddenly flies out the window, and we’re going to do it without any procedures or procedures.
“We don’t know enough about the platform,” he continues. “You cannot intimidate people in one way or another. It’s about sitting down and talking about options. This is frustrating as a participant. They should represent our interests as realtors, but also protect consumers. And performing with something so politicized is what upsets many participants. “
iProRealty conducted a survey among real estate agents in Toronto and consumers, who found that nearly 90 percent supported ending blind trade.
Neither Kochev nor Mansur believe that the prohibition of blind trading, as the liberals suggest, is the answer. Like OREA, they believe that consumers should have a choice. It is unlikely that any seller will opt for transparency though. Even Kochev and Mansour admit that if their clients had a choice when it comes to selling their property in the Toronto real estate market, they, as realtors, would advise blind bidding as they tend to hold a higher selling price.
A transparent bidding process can lead to a higher price for the seller if the prospect realizes that his bid is around the corner and is asked to go a little higher.
However, the blind bidding process tends to attract emotional bids from disappointed buyers who are accustomed to losing. Kochev and Mansur say they are bidding high, sometimes offering $ 200,000 for the next competing bid, and escalating the overpricing in the districts, something that the liberals’ plan to ban blind bidding wants to avoid.
While neither realtor supports a blind bid ban, they both agree that the industry needs more transparency. Mansour is particularly concerned about extremely low and insincere listing prices and marketing, which subsequently fosters sales that are 50 percent higher than requested. According to her, they form the idea that it is necessary to achieve a high level in order to achieve success.
“Just list the property in and around what it’s worth, and then let people agree on it,” Mansour says.
She says she follows the same methods to give her clients a shot in the current market. But she would prefer that politicians and real estate organizations find a way to maintain honesty on listings and end practices such as refusing offers that tend to overcharge. “A lot of realtors I know think the same way.”
“We don’t like to trade wars.”