As the housing market gets more intense, with real estate agents handle 10, 20 or 30 offers at a time for a single property, the rules of a bidding war can get overwhelming, even for seasoned professionals. This guide on the rules of a bidding war, provided by the Real Estate Council of Ontario, is sure to help realtors get a handle on high demand property offers.
The Basic Rules
As a real estate agent, you have to disclose how many offers are currently in play to your client or anyone who’s already made a written offer for the property. You also need to tell your client whether or not you’re representing the property’s seller as well as other potential buyers, if you’ll be lowering the amount of cooperating commission and any changes within the bidding process. Now, while you can disclose the number of other offers on the interesting property, you can’t discuss how much that offer is.
Offer Registration
While buyers have a right to know how many offers are up for the property before submitting their own offer, the registration process can become messy when several offers are on the table. Since Bill 55 was passed in 2015, offer registration now requires that the listing agent can’t disclose other present offers until your offer has been signed. Brokerages need to keep a copy of all written offers and counteroffers, or an offer summary document. Finally, buyers who’ve made an offer can request the number of other offers to be presented to them.
Dealing with Pre-Emptive or Bully Offers
Bully offers are common in hot real estate markets when buyers are eager to get their offers in before anyone else. When dealing with pre-emptive offers, you’re required to tell your client as soon as possible unless otherwise informed. You need to have written consent from your client as to how to proceed for offers that come in before the offer date arrives.
Multiple Representation
In offers that have multiple representation present, there are certain guidelines that need to be followed. You’ll need written consent from the seller, the buyer and both brokerages when submitting an offer. You also need to tell anyone who’s put in a written offer that you’re representing the seller as well as the buyer. Lastly, if you’re the listing agent for the property and notice multiple offers that come from the same brokerage, it’s your responsibility to tell their agents.
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