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When Vanessa Witkowski and her husband were commissioned to sell her grandmother's house, they both realized that they did not want to do it in the traditional way.
So, they decided to auction the house.
"We really did not like the traditional process, my husband and I would prefer that the house be sold to someone who really likes and values it, and not just that someone who losing its price because of undisclosed information, "said 47-year-old Witkowski.
"It just seemed very stressful and, in some situations, unfair."
The East Toronto home will be posted next month with a $ 675,000 reserve price through the On The Block, a Toronto-based brokerage specializing in property auctions. real estate online.
Offers submitted via a blind bid process
Currently, in the majority of real estate transactions, interested buyers are welcome to submit an offer via a blind bid process not knowing if there are other offers or what? They contain.
Through this method, in a booming housing market, buyers can often blindly offer more than they originally planned to spend in hopes of beating their competitor, and sellers often take it away. .
Although Witkowski wants the house to be sold at a fair price, she wanted all interested people to be able to make serious and informed offers. She therefore chose to sell it as part of an online auction.
OREA wants a revision of the law on real estate and commercial brokers
In Ontario, real estate agents are allowed to share the price of a competing bid with another buyer, but only if all parties involved agree to the auction process. Although allowed, this practice is rare, especially in a market where demand remains higher than supply.
The Ontario Real Estate Association, the industry group that represents over 70,000 real estate agents, goes even further.
Although this is not mandatory, this option would be available if the buyers and the seller involved were in agreement.
Tim Hudak, chief executive of OREA, says there is a growing demand for more transparent transactions, which is already being proposed in some US states and in Australia, where open auction wars can often break out in the courses before properties.
"We think people should have a choice," he said.
"Some consumers want everything on the table to be open and transparent, and some homeowners think they'll get the most money or the best deal through this method."
Hudak said that, as in Australia, a more open process in a situation of plurality of offers could result in "a little bidding fever" and could drive up housing prices.
The industry has long been waiting for another option
Murtaza Haider, an badociate professor at the Ted Rogers School of Management at Ryerson University, said the real estate industry has long been waiting for another option from the current auction process based on the 39; ignorance. "
"This will be a very important step to prevent price rises and inflation when prices are out of line with earnings or increase beyond what we would expect from us. They are increasing due to demand, "said Haider, whose research includes housing markets.
He added that a more open offer process can lead to more savvy buyers, but can also benefit sellers of a less dynamic market by bringing in more hunters at home who fear the auction.
EBay – but for real estate
Daniel Steinfeld, chief executive of On The Block, said his company had sold a half dozen properties in the Greater Toronto Area as part of an open auction process since its launch. last year. He compared the process to the website, eBay, but for real estate.
He said most of his clients were choosing the auction route as they had been burned in the past, buyers avoiding the auction process blind.
"Until now, and frankly still, most people think that there is only one way to do it," Steinfeld said. "This led to some uncertainties and frustrations people had [about the real estate market]. "
Realtor Daniel Steinfeld compared the process of selling a house in an open auction to the eBay website, but for real estate. (Sean Kilpatrick / Canadian Press)
Toronto Real Estate Board President Garry Bhaura said the proposal raised privacy concerns, but ultimately, having more choice was good for the consumer.
"Some would like this option and others would opt for the status quo," he said in an email. "In the end, the choice will be and should be the consumer."
The province indicated that it is still reviewing the recommendations made by OREA.
No province currently allows details other than price to be revealed among buyers during the bidding process, but a spokeswoman for the Quebec Federation of Real Estate Boards said she was also reviewing these rules and that she should be the subject of a recommendation in the coming weeks.
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