If you have ever put an offer on a house in the GTA (Greater Toronto Area) in recent years, chances are you were up against a number of others vying for the property. And chances are that your offer was turned down in favour of a higher bid or you were the strongest bidder and found yourself having to dig much deeper into your pocket than you had anticipated.
If that sounds familiar, you’re not alone. Some of that may have been in part a result of unethical real estate agents using “phantom offers” to inflate offer prices.
And now the Ontario government is introducing new rules that will help crack down on unethical practices. Real Estate Council of Ontario (RECO) deputy registrar Bruce Matthews said that they are making it “certainly harder to fudge the truth.”
Effective July, selling agents will be required to keep a paper trail of all offers – six years for winning bids and one year for unsuccessful bids. Also, selling agents much receive a former offer in writing in order to claim to have a bid on a property.
This move isn’t expected to help cool down the GTA’s housing market, as agents will continue to list houses at a low price, which will generate multiple bidding offers. Further, more importantly, as discussed in previous articles, the real estate market in the GTA (most notably Toronto), is driven by a lack of supply and a high demand.
But at least there will be a paper trail, and people can request for proof of other offers. If a selling agent is found to have contravened, the agent will be penalized, which may result in the revocation of his or her license.
If you would like to learn more on the upcoming changes, contact a Century 21 King’s Quay real estate representative today.