The recent Liberal election promise to ban blind bidding was an appeal to Canadians frustrated with increasingly unaffordable home prices and angered by a lack of buyer-side transparency. At a time when most buyers were forced to enter bidding wars, in many cases multiple times before winning with a well-over-asking price offer, a federal election with the possibility of a majority was in the balance.

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The list of what governments (federal, provincial and local) can and should do is long and complex. By G7 standards, Canada is a million homes shy of what we need for our growing population. Removing red tape, adding density and solving NIMBYism are key to getting more housing. Adequate infrastructure investments of more public services, roads, parks, schools, firehouses and community centres are all fraught with bureaucratic hurdles. Growing the number of homes in Canada will be hard.

Open bidding won’t help to lower prices; only more housing inventory will do that. A recent Smart Property Institute study of countries that mandate open bidding found that home prices have escalated even faster than in Canada in recent years. As for more transparency, we’ve had truly open bidding for a long time, in the form of residential auctions. While totally transparent, these are rarely used because most buyers and sellers are loathe to participate in an open auction process for their most important investment. Open bidding, especially during today’s frothy seller’s market, could provide many similarly frantic situations.

Limiting transactions to only open bidding would also take away the seller’s right to choose how they sell their home. Blind bidding has worked well in Canada for decades but current disclosure laws on the offer process (which vary per province) provide very little buyer side transparency. Buyers are left in the dark and even after the deal is done, they are left wondering, What should we have offered? If a buyer wins the bidding contest they ask, was our bid too high? If they lose, they ask, should we have dropped this condition or gone $10,000 higher? And why did we lose out on that home we wanted so much?

If we are to maintain closed bidding as the primary option for home sellers, we as an industry need to argue for more accountability and clear post-transaction transparency that would give buyers more confidence in the process and add a layer of trust that isn’t there today.

What post transaction transparency could look like: after a sale is finalized, all the buyers who bid on or saw the home and considered putting in an offer could, through their agent, get a simple report that shows what the offers were. They would see “Offer A” (buyer’s name and information not showing) with the price offered, the conditions and closing date asked for, time stamped for when it was written and when it was presented. If there was a counteroffer, the details of that would go on the line below, noted as “Offer B” with the same information.

The technology is available to do this today with transaction management platforms that could be mandated, and reports built to offer this accountability. The Toronto Regional Real Estate Board’s planned blockchain could take past transaction transparency to an even greater level.

If our industry argues for more accountability and transparency, would it help to justify keeping blind bidding as an option for sellers – and help provide the buyers with a better experience at the same time?

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Todd Shyiak is vice president, national network development, Century 21 Canada, where he oversees operations including the selection and servicing of all technology and training, leads national recruiting and retention initiatives and actively pursues M&A opportunities for C21 brokers. He has been in the real estate industry for decades. As an agent, Todd sold over 850 homes and condos. He has managed and mentored many agents, sold MLS systems into dozens of boards across Canada and the U.S., consulted and created broker technology and tools and ran his own agent recruiting company.

42 COMMENTS

  1. As real estate professionals our job is to properly advise our clients on market value and market conditions whether we are representing our buyers or sellers. And make sure the buyers are properly qualified.
    Furthermore, our obligation is to follow the rules set by our regulators whether it is “blind” bidding or auction.

    I believe the biggest concern under current system is not a price issue but a trust issue.
    We can’t control others, but if we do our job properly, we can advise based on thorough research and properly educating our clients. It boils down to a trust relationship between our clients and us … whether we are representing the buyer or the seller.

    • Well stated Sylvia. My only addition would be to insert the word “deserved” before the word “trust” within your last sentence wherein you state: “It boils down to a trust relationship between our clients and us…”. Unfortunately, too many clients trust some untrustworthy Realtors…undeservedly so, which makes it hard for those same burned clients to trust another Realtor going forward. Those burned clients talk. Ergo, the poor trust factor numbers for Realtors in general. The overriding rule that a Realtor cannot publicly out another Realtor for justifiably-alleged misconduct contributes greatly toward keeping miscreants employed…and the poor Realtor ratings in place. That’s the fault of the powers-that-be. Miscreants simply take advantage of that rule. You can’t sanitize a mud-rolling pig with cover-up-itis-rules designed to protect said pigs from their non-mud-rolling compatriots’ concerns. This is politically-correct censorship of the worst kind. The wrong people are getting cancelled out as the result. But how else are the powers-that-be going to continue collecting massive dues to fund their empires except via relatively small amounts from large numbers of amateurs/failures-in-waiting? Real Estate University graduates should also be awarded a second license: Dues Payment License. After all, owning/running a real estate sales representative/brokerage oversight operation—like a Tim Hortons franchise—is in and of itself an organization that has a license to print money.

      Organized Real Estate oversight organizations exist in order to keep disputes between Realtors and clients out of court. They’re doing a good job. That’s not a good thing.

  2. First off: Just as Realtors owe a fiduciary duty to their clients via contract, so too governments owe a fiduciary duty to ‘their’ clients—we the people who hire them and pay their salaries—but to no one else. It’s called the Social Contract. That means foreigners should hold no sway in elected federal government members’ minds when it boils down to who the hell ‘our’ politicians are representing. Due to the fact that the flawed concept of globalism—aka Communism—is steadily seeping into the mindsets of governments of all stripes nowadays, the concerns of citizens is being eroded at the expense of concerns for foreigners—those non-citizens who do not elect our governments and who pay no taxes toward paying them (unless by graft) to the detriment of our standard of living. Ergo, if one follows that logic, foreigners should not be allowed to purchase residential real estate in Canada unless immediately moving here to occupy said premises forthwith, and therefore planning on contributing to our standard of living via paying taxes…just like the rest of us. That takes the excess foreign buyers with gobs of cash contributing to rising prices out of the market. Our governments owe them nothing. By extension we owe them nothing.

    Second: Where does it say every twenty-something or thirty-something wannabe first-time homebuyer deserves a new 2,400 square foot home out of the gate? Where does it say the same crowd deserves anything at all in a capitalist polity? I have news for them; they deserve nothing except the opportunity to earn a good education, get a job, work hard, save, save, save—avoiding the pull toward fancy new cars bought on time, fancy clothes, restaurant meals, trips abroad—you know…having it all out of the gate. We have a spoiled, entitled group of youngsters these days who don’t know what the word “sacrifice” means in reality. They have no long-term goals or plans; they live for today…and spend for today, looking for government handouts to save the day. Government handouts are not government handouts; they are taxpayers’ handouts conducted/distributed by elected politicians, those government types who’s only personal concerns are geared toward the next election cycle using the promise of our hard-earned money as bribes. Thus they are short-term thinkers/planners. We are witnessing the emergence of a socialist class of voters (thanks to our education system) intent on changing our very successful Capitalist system into a globalist Marxist system of governance, and because of our overall economic success to date, we can afford socialist programs…until the well runs dry, when everyone else’s money runs out. The government has no money. The government simply takes our money and redistributes it for votes over the short term.

    In a democracy, we get the government we deserve. That much we ‘do’ deserve.

    Life ain’t fair. It’s just life. Get on with it as best you can. The cream often rises to the top…usually over time. The sludge usually sinks to the bottom. That’s life. It’s always been life. Marxist government-style interference will not change that, because Marxism takes not into account that inalienable thing called human nature, which at base desires to strive for success and reap the rewards personally. Government just gums things up. Capitalism causes one to be efficient with time, resources, thought processes and focus. Governments operate in the opposite vein, because they don’t have to be efficient or good at anything…except promising the moon prior to the next election. We are suffering from a communal addiction to wishful thinking when we believe government has the answers to much of anything. The very meaning of the word “govern” says it all…to restrict. That is the government’s mindset. People who want to restrict your way of life go into government via left-wing parties They think they know better than you what you should want and do.

    When sellers want to sell their homes, they immediately become Capitalists…even if they were socialists when buying same. That about says it all, don’t’ch’a think?

    You can’t change human nature.

    Take a hike Marxists. You’re all about flawed theory.

    Thoughts?

  3. A comment from Realtor Murray Metherell:

    Why is it referred to now as blind bidding? It is the same thing as Tendering that is done throughout industry, it is how most contracts, public and private, are awarded and it’s quite acceptable.

    The suggestion you make in your article would not be acceptable as the buyers names are confidential so you would have to put “Offer A and the price and terms and conditions as well as the counter. Then Offer B and it’s terms and conditions. You would also have to include any other factors that affected the decision of the Seller. I recently lost out in a multiple offer situation because another Buyer wrote a “Heart Strings Letter” and that’s what swayed the Seller to accept their offer.

    On the other hand open bidding is used for lots of Real Estate transactions. It is quite common on the prairies and is used by governments to sell crown lands, particularly minerals. It would work well for housing because you could maintain the buyers confidentiality while other buyers can see in real time what is happening.

  4. No it would not, how could it? The same was said about discount brokerages being allowed, about fsbos having access to the MLS Systems, about sales prices being published. Yet here we are, with GTA prices more than doubling in 4 years, and cities like Brampton, Oshawa, Georgetown appreciating by 20% since April.

    While buyers complain they want an open system, it’s a given when the eventuality of that kicks in, they’ll rue the fact they lost because their bid was shared. Even so, not all buyers will want their bid telegraphed to competitors.

    This process is a shortsighted mess by the government of Ontario in that it completely disrespects buyers. Ontario’s new proposal is that open bidding would be the choice of the seller, which creates a hell of a problem for the buyer who wishes to submit an offer but not have it publicized to competitors. The industry will face a different issue in that regard – a confidentiality agreement signed by the seller before the buyer submits an offer.

    Was this not entertained by the Consumer Services Ministry?

    These are truths that is currrently regularly happening when it comes to the current process:

    Too many agents are disregarding comps and instructing their buyers that to win they must beat the last sale price. This is regardless of whether or not the last property sold was even a comp.

    Too many agents are dissuading buyers from placing any conditions whatsoever. Imagine if they insisted they do how much saner and fairer the negotiations between competitors with the sellers it would eventually come back to.

    Agents typically listing properties outside of Toronto are most likely to not provide an pre-listing inspection report and just give between 3 and 5 days to offer date with 2 of those being the weekend despite knowing full well Covid visitations severly restrict the ability for a buyer to book an inspection under these reduced business days.

    Worse, agents are dissuading buyers from even requiring sellers to represent and warrant chattels be in good working order. Now, not only are they making ridiculous price , they’re being enticed to buy the house absent an inspection and to take it all in as is condition. Listing agents are so accustomed now to taking advantage of buyers, half of them can’t even be bothered to find out how much the rental is for a hotwater tank or HVAC.

    Too many agents are setting up their buyers for failure – they’re purposely herding their buyer clients into a competition when, they neglect to properly protect their buyer’s interest by allowing a pre-emptive offer to carry a lengthy irrevocable which in turns allows for competitors to come forward and give the seller the time to play them one against the other.

    There’s one other matter. The lawsuits demanding the publication of sales prices was all under the pretext that buyers would be more aware of pricing. Every agent who’s had listings and buyers in the last 2 years will admit to receiving or making no contest bids that are tens of thousands, even hundreds of thousands higher than the 2nd runner-up.

    The only thing that price disclosure has done is turn real estate into a social media sport, where, all the competitive VOWS without setting foot in a property readily offer up an estimate of price which buyers fall prey to. And on massive sites like Reddit, users uses these available prices to republish them for critiquing or to just blindly offer up their own estimate of price citing nothing in support.

    So, no, open bidding will not stop the rogue buyer from greatly outbidding the competition. What will stop it is for the provncial regulators to actually step up to the plate, stop pretending their doing something about it, and actually do something to halt the horrible agent practises noted above.

    Instead of sending emails to industry members asking how they wish to be policied, maybe entities like RECO could actually conduct annual surveys with random buyers and sellers about their experience.

    • I like your list of truths that are currently regularly happening when it comes to the current process. You captured it in a way that will get realtors thinking about what we do. At least it got me thinking.

  5. To Dirk Diggler HURRAH! Logically and clearly stated. The only FAIR way to handle multiple Offers is AMOUNT DISCLOSURE during the Offering time process. This does indeed establish the true market value…. a collection of bids by a group of serious buyers. This comment is made by a Broker now in his 68th year practicing!
    Peter G Davy

  6. Open bidding will do nothing to solve the housing crisis. And it’s all great to talk about these things in a sellers market but what happens in two years when it’s back to a buyers market? Then to top it off, it’s PRIVATE PROPERTY, I’ll sell it how I want.

  7. I think the Australians have it right. Auction style / open bidding – where buyers stand out front and openly bid through an auction. Seems like a much fairer game for everyone involved.

    In an low inventory market, the seller’s still get their “bidding war”, and the buyer knows who/what they are up against.

    The process is transparent from go.

    Great article about it here…

    https://www.cbc.ca/news/business/here-s-how-to-buy-a-home-in-australia-should-canada-follow-its-lead-1.3826727

    • I have looked into the open auctions held in Australia. False bidders are put in place by sales reps , by seller planned together to bid up prices. So that system is not without its flaws.

      • Surely cooperating agents from the buyers side would know if there were false bidders. It’s a small works when it comes to agents knowing other agents in town No?

  8. Blind bidding is a made up term and frankly inflammatory. My Buyers do not make blind bids ,
    they are educated and aware of all the market conditions. They then put there best offer forward
    that suites there financial ability. If they get the home great, if not , it is on to the next one .

    In B.C the listing Agents must keep a record of all the offers placed on a listing that receive multiple offers. However we do not disclose those offer prices to the Buyers involved.

    Undersupply is the BIG issue, as mentioned so eloquently in the article. Government at all three
    levels have had a hand in this. Yet they can not
    offer solutions outside of taxing , taxing , taxing
    how has that worked out for Canadians!!

    • If we really wanted information to be more freely accessible, we should start with making all land title information freely available on each government’s GIS.

      Government’s too often think they can “solve” things by adding more friction to a market (adding complicated steps). If every buyer has free access to the same information, then the market can decide value.

      One other issue here is that price is not always the most important issue on each contract. An auction discounts the value of specific conditions of the property or terms of the sale.

  9. A year ago I would have 100% disagreed. Now I 50% disagree. Telling what offers were after the property is sold is useless. Just something else for us to do. What I would like to see is, we all get notified as offers come in on a property what the price and conditions are if you showed it. Even when you have the highest offer on the table the listing agent won’t tell you and keeps asking if you want to go back to your people and see if they want to improve. Not really fair to the buyers or their agents

    • What needs to be mandated is that at the very least, the listing agent must tell the buyer with the best bid that they are the best bid. Preferably would be to tel each buyer where they are in the order.

      There is currently no prohibition against that in Ontario but ask most agents and they’ll readily spit out a non-factual claim that they can’t say that, yet they think it’s okay to mislead by asking the lead if you want to improve your offer.

  10. As an industry, we must be cautious not to let the current inventory crisis and rising prices cloud our thinking and decisions about blind bidding. We need to examine its merits or downfalls objectively and not only through the lens of the current situation.

    Blind bidding may not be responsible for low inventory and affordability. It is still a system that needs to be properly reviewed.

    It’s clear that blind bidding inherently lacks transparency.

    That’s why it’s called “Blind”.

    Lack of transparency usually invites abuse. Unethical, inexperienced, or unsupervised agents can easily fail to follow the protocols.

    We see this regularly with the current rat’s nest of guidelines for presenting multiple offers where transparency is tenuous.

    There’s no question that the process of presenting multiple offers needs an overhaul.

    Buyers who offer $50-100,000 over the next highest offer have been abused by this lack of transparency. Blind bidding is a wild west shoot-out.

    With respect to the author, transparency after the fact seems futile and incendiary. It provides no solace to anyone involved if the deal is done. It could trigger legal action by those overpaying buyers.

    It takes decades to affect change in our industry.

    Let’s try to get this one right!

  11. Governments trying to bring in legislation to control the purchase process and articles like this pontificating how to treat buyers better lack the perspective of history or for thought of the future.
    When sellers were begging for offers, dropping there prices begging for offers, I did not here of any seller protection, nobody cared about the sellers equity or loss. Now when the market is hot for sellers you wish to limit or take away the advantage they have, and the risk they withstood?
    Only fools believe the market won’t change, history proves that.
    Articles like this and legislation proposed to protect buyers is at best unfair and at worst will have dire effects, but most of all lacks for-sight and is politicians looking for votes, it is the flavor of the da and has no place in policy..

  12. Disclosing the values of the other offers could make the winning bidder concerned about how much they paid and perhaps bias an appraisal should the #1 offer be significantly higher than 2nd best. The potential for deals not to close because of this would be of significant concern. I agree that we need inventory to solve this issue, but we cannot develop for development sake. The current Ontario Government is already interested in developing environmentally sensitive lands. Let’s get current proposals moving, Municipalities need to clear the way for these projects to get off the ground. Time for the smaller municipalities to go up as well!

    • And the water and sewage disposal hasn’t been mentioned. Under all is the land, and the good Lord isn’t making anymore. So what we have certainly has to be put to highest and best use to support the underpinnings.

      If twelve people live in a house built for four people, that house pays the same taxes as the one with four living in. But the excess water used and toilet flushings have to be taken into account. Each has to go someplace to be processed.

      I’ve been in houses where every inch of floor space above grade has no furniture, simply mattresses lined up on the floor touching one another. Dozens. And likewise in basements, bunks stacked on top of one another literally wall to wall floor to ceiling with only tiny windows, (a fire hazard) bunks built from shipping containers nailed against block basement walls. No running water on basement level.

      Who figures out how that system works.

      And THAT type of water and sewage issue takes years to figure out holding up development. Extra local traffic and road construction needs to be taken into consideration and studies marrying all this sort of information and projections.

      In one particular area development acreage was bought and it took more than twenty years to begin development talks. There simply was no place in the infrastructure to allow for moving forward.

      So knowing all this, how are tens of thousands more immigrants invited to make Canada their home, knowing there is no place for them to live…

      Carolyne L 🍁

  13. Manitoba rewrote the Condominium Act based on complaints from a few buyers. Sellers were completely left out of the new condo act process. The result has been devastating to the condo market in Manitoba.
    Changes to the offering process seem to consider only the buyers of properties, not the sellers, many of whom are relying on the sale of their home for retirement.
    The real problem is the supply of housing. The shortage is the result of the actions of several levels of government, immigration, red tape and the cost of red tape to name a few.
    Using a bandaid solution to solve the problem governments have created rarely works. Instead of virtue signalling, governments need to look inside to find the solution.

  14. In my 30 years of sales I
    always told my buyers when they made an offer to make their best or closest to best offer on a property.
    A price they could live with if they got it or did not.
    Seldom lost a buyer or had to deal with buyers’ remorse.
    The responsibility for handling their money and emotions is the adult sitting in front of you!!!!
    I had a 70% repeat and referral rate.

  15. No disrespect to my old friend Todd but I couldn’t disagree more. What benefit does a buyer reap if they discover they missed out by $1000 or beat the next highest offer by $50,000. Just heartache. National solutions for a market that is so very regionalized just don’t work. Markets vary in towns and cities within a 100 miles of each other, let alone coast to coast. Real estate regulations are controlled on a Provincial level and that’s where it should remain.

  16. Has none of these policy decision makers ever bought on eBay or at an auction and ended up overpaying because of a “auction frenzy”? Open bidding will create more bidding wars not end them. If the multiple offer situation was regulated with a ” one and done ” and 2nd round “if” there are identical offers only , it eliminates so called “bidding wars”. What needs to be addressed is the massive intentional underpricing and the essential elimination of the building inspection, both make it almost impossible to act in the best interests of our buyer clients.

  17. I disagree. Any change in the process takes the seller’s decision making out of the process. They still like to choose who buys their home and at what price. Many times they will pick a family that writes a letter and tells the sellers a bit about themselves, which has always been part of the offer process even in a balanced market. We know all the buyers are aware of what they offered.
    We do offer summary documents as each offer is presented and are available if any agent requests it but the caution is why should the eventual buyer know what the other offers were and what’s to stop them from re-negotiating the sale price? Many times they don’t care because they won and now have a home to move to. When the market shifts, and it will, there would be absolute chaos.

  18. I agree that all Buyers that were involved in multiple offers should be given in writing what the competing offers were.
    The rest of article was good.
    The government should STOP IMMIGRATION until the supply and demand is more balanced.

  19. I believe you are totally correct but missed a BIG point.

    Many times one puts an offer on a property that had no offers for some time and then there is a magic competing offer that comes on the same day you put an offer but a few hours later.
    RECO will not agree to show those offers to the winner after the fact. I wonder why? There is no private information there. nothing that is not posted on MLS after the sale…
    These bogus offers are helping inflating the housing prices and put a lot of commissions and fees in you know who’s pockets and create more difficulties to own a home. A simple report from the brokerage can show what properties that agent showed that client over time. This can help to track down these “fortunate” offers for the seller agent and help crack down on lots of shady behaviour from agents side and help identify which offer is real. We all know that to put an offer means nothing unless it was accepted and you actually put the down payment… No wonder our reputation is perceived as close to crooks…

    • Totally disagree with you! Why would losing bidders want to know? Does it matter at that point? The definition of market value hasn’t changed in my career. “The price a buyer is willing to pay and a seller willing to accept”. When inventory gets balanced, this problem goes away. As for now, keep selling real estate.

  20. I am so against blind bidding and have been since the start of my 27 year career as a real estate sales representative. They put buyers in an unethically unfair situation. Is it fair to have paid say $50,000 more than necessary only because you didn’t know what you were competing against? The grind that buyers, especially first time buyers are put through is despicable and it feels like hijacking to me. And on that note, since I feel this is relevant to the platform, I’m also for making building inspection and financing conditions mandatory allowing a minimum of three days for those conditions to be waived. I will always do the best I can for my sellers whether I agree with today’s accepted practices or not But any buyer today will tell you that this blind bidding war stuff is criminal. And let’s not forget that most sellers then become buyers.

    • And why would anyone pay 10s of thousands more than is necessary? Open bidding wouldn’t necessarily stop someone from paying $50,000 more than necessary – that $50k could in fact end being just $1 more than the runner-up, there is after all such a thing as a comparative market analysis. Or the $50k could be because the buyer just said to hell with it, beat me if you can.

      • Does the seller-owned listing have the right to include in his MLS listing notes that his decision overrides blind bidding? Even if federal government laws state otherwise? Does the listing MLS homeowner lose the right to choose how he wants to market to sell the subject property particularly a mat home?

        We nearly live in a police state already.
        Interfering in privately owned home ownership method to sell is quite scary.

        Carolyne L

        Sent from my iPhone

  21. Increased inventory in the country is very much needed for sure, BUT, if that inventory is priced just as high as everything else than that really does very little in providing the 1 million home shortage affordably. In my area new, smaller homes sell far above older, larger homes on bigger lots driving both ends of the market out of reach for many. We need smaller homes people can buy at affordable prices.

  22. Excellent article. You are 100% correct…Open bidding won’t help to lower prices; only more housing inventory will do that…and many fail to realize that point. The option of post transaction transparency is a valid solution.

  23. Disagree 100%! Think about it. We are adjusting our system for 1 entitled generation. What happens when the successful bidder finds out he/she over paid $50,000, $75,000, $100,000 and sometimes even more? I can assure you that the toxic fallout will be worse then what we have now.

    • One entitled generation? That’s awfully presumptuous and just flat out wrong. Millennials are the poorest generation to date. Between inflation, the rising costs of real estate and unstable and precarious employment its no wonder so few can afford homes. Blind bidding is criminal. Period.

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