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New rules are now in effect when it comes to bidding wars, which have become the norm for those on the house hunt in Toronto.
The Real Estate Council of Ontario is now officially cracking down on what it calls “phantom offers” — fake bids from agents trying to drive up the selling price of a home.
With the new law that came into effect on Wednesday, agents won’t be able to indicate they have an offer unless they have it in writing, and brokerages will have to keep proof of those written offers for a year.
In Toronto, a place where bidding wars are standard, Ryan Taylor with ReMax Hallmark Realty Ltd. told 680 NEWS buyers can often see the people they’re in competition with.
“Those 17 families sitting outside the house, hoping that they’re going to get this home […] they’re seeing each other walking in and out, so they’re aware that there is interest in this property,” Taylor said.
Taylor said even bully offers — typically well above-asking price that’s submitted on a property before the planned offer day — are creating their own bidding wars.
“Someone will bully an offer, and four or five will show up. They bully bid is in a position where they don’t want to be — that’s what they try to avoid. If you are bullying out there, try to go the first two days it’s on the market.”
Records are constantly being set, with some homes going for hundreds of thousands over the asking price.
But Ryan anticipates the upcoming Pan Am Games will cause a bit of a market slowdown with people avoiding the traffic headaches during that time.