My name is Jonathan Edwards I am the Broker of Record of Remax Urban Toronto Team Realty Inc. Brokerage. I am emailing you today regarding the bidding war process.
The Toronto market is on fire lately but the housing market itself has been particularly on fire and been like that for some time. Due to the fact that there is no more room to build within the city and the fact that the housing inventory is literally going down daily due to houses being ripped down to build more condos. There is always going to be a strong demand for houses…its just a simple supply and demand issue. I believe that us as Realtors need to adjust to this and create a more efficient process for bidding wars.
Me and my agents are dealing with this process on a daily basis and one thing we have all noticed is that the system is very flawed.
The process starts off with submitting an offer and of course the selling agent is not allowed to tell any of the buyer agents what any of the other offers are. If a few of the top offers are close the Selling agent will then go back to the 2 or 3 offers that are the highest and ask them to improve. Then again you re submit your offer and the highest offer will take it. Yet again no one knows what anyone is offering.
I have had instances where clients would have paid more but ultimately did not win the house because they had no clue what the other offers were.
In an auction scenario we would have all the potential buyers put into a room and have them bid on the property. You could increase it in 5k increments and have people raise there hand to bid. Everytime someone doesnt raise there hand then that person is out. You keep increasing by 5k until there is one person left.
Or you could simply hire an auctioneer to run the whole process and run it like a typical auction where people raise their hand to make a bid.
This way all the cards would be on the table so to speak. The person that was willing to pay the most money would win and the seller I believe would ultimately get more for their house.
This process would also be much more time efficient. Us as Realtors are forced to wait with our clients 3 sometimes 4 hours before we have an answer and ultimately its a huge waste of time for everyone but 1 party.
This would also eliminate any sort of biased a seller may have for a particular buyer. Its all based on whoever pays the most money gets the house. Of course if the price doesnt hit the number the Seller would like then they dont have to accept.
Overall I see no negative in this process. Its more fair to the general public, causes less frustration and makes the overall process much more time efficient.