New home buyer Marko Sijakovic and his fiancée had to contend with months of looking and 10 bidding wars before they were finally able to purchase their first home.
Adding to the stress of a record-breaking market was the fact that Sijakovic didn’t how many other buyers he was up against, or how much they were bidding.
“You don’t know who you’re going against you don’t know how many there are. It’s a really grey area of what’s really happening,” he said. “Sometimes I felt like I was negotiating with myself instead of a counter party.”
That is the case in much of Canada, where information on other bidders or a home’s history is not revealed by realtors. Today, Ontario’s Finance Minister Charles Sousa admitted to CityNews that there is a transparency problem.
“Buyers are frustrated every time they get into these bidding wars. We recognize more and more are happening not just in Toronto but it’s expanding beyond Toronto and the GTA,” he said.
He revealed it’s an issue he’s going to bring to the table when he meets with Mayor John Tory and federal Finance Minister Bill Morneau.
However, there is a way for buyers to get a little more transparency about who else is interested in their potential dream home. In July 2015, the Real Estate Council of Ontario introduced Form 801 – giving buyers the power to request documents with the names of other potential buyers and their agents. However, exactly how much people are bidding is still top secret for potential buyers.
In other jurisdictions, more transparency is the norm. In Australia, home bidding auctions take place on the property’s front door. All interested parties come face to face and go head to head.
Buyers there can also obtain home inspection results, sale-price histories and information on recent sales of comparable and neighbouring homes — without going to an agent to get the information.
In Nova Scotia, people in the market for a new home have access to a house’s history and information about properties in the neighbourhood. And over the border in Buffalo, every time a house changes hands, the old and new owners and the selling price are listed in the local paper.
Sijakovic says that he would have welcomed information like that when he was looking for a home
“In any real market the transparency needs to be there. It doesn’t matter what you’re going to buy,” he says.
Getting the Ontario market to make the change to public bids may make sense for buyers, but real estate experts say not everyone would embrace the change.
“It’s a different way of thinking, and getting the market to adopt that is going to be an uphill battle,” says MoneySense senior editor Mark Brown. He adds that more transparency wouldn’t be much help in cases where there’s only one offer on a house, or when a home is in a highly coveted neighborhood.
Realtor David Batori says when you’re on the other side of the bid, it’s better not to reveal information. Greater transparency for bidders may mean sellers don’t get the generous offers they’re hoping for.
When it comes to concerns about phantom offers, Batori believes it’s a thing of the past. But even realtors can never be sure.
“Sometimes you have a feeling,” says. “But I can never say for sure because you just don’t know.”