The Toronto market continues to stay strong, with this comes the high demand and limited supply . Due to the fact that there is no more room to build within the city. Housing inventory is declining daily, houses are being torn down to build more condos. There is always going to be a strong demand for houses, the problem we face is the shortage of supply and increasing demand.
I believe that Realtors need to adjust to this and create a more efficient process for bidding wars. My team and I are dealing with this process on a daily basis. The one thing we have all noticed is that the system is very flawed.
The process starts off with submitting an offer. The selling agent is not allowed to tell any of the buyer agents what the other offers are. If a few of the top offers are close, the Selling agent will then go back to the highest offers and ask them to improve.
Then again you’re submitting your offer and the highest offer will take it, as 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 $5000 increments and have people raise there hand to bid. Each time someone chooses not to raise there hand that person would be out.
Another alternative could be to hire an auctioneer to run the entire process. The person that is willing to pay the most money would win. The seller, I believe, would ultimately get more for their house. This process would also be much more time efficient.
As Realtors, we wait with our clients up to 4 hours before having an answer. Ultimately it’s a huge waste of time for everyone but one party.
This would also eliminate any sort of biased a seller may have for a particular buyer. It’s all based on whoever pays the most money gets the house. Of course if the price doesn’t hit the number the Seller would like then they don’t 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.