I wonder could an inspector sell his information to others .
Might be a good idea to talk to the sales person .
Please let us knowhow things went Roy
** ****Real estate auction site offers analternative to bidding war hell. **
Biddingwars in Ontario real estate are an emotional issue and everyone in the markethas heard stories of horror or triumphs against all odds.
At theheart of all those stories is a core of uncertainty: did I pay too much? Did Isell for too little? Were those other bids real?
That’sbecause these bids are blind, submitted only to the seller who is the singleparty who sees all the bids.
Butthere are some who’d like to try it another way. On April 10, DanielSteinfield, a realtor and CEO of On The Block Realty Inc.,
will offer for sale a detached house inMississauga on 1105 Saginaw Cres. where all the bids can be viewed by otherhopeful bidders,
all managed in real-time by his open online auctionsite getontheblock.com.
“We’re trying to make something that’s morepalatable than what people have been used to,” says Mr. Steinfeld,
whoalso operates a traditional non-auction real estate company with his wife,Katie Steinfeld (who is the On The Block’s co-founder and broker of record).
Thecouple has been working on the site since early 2017, but Saginaw is only thesecond property the company has attempted to auction.
“We’re trying to prove the concept on acase-by-case basis, if the industry isn’t comfortable with it we fail right outof the gate,” Mr. Steinfeld says.
Interestedbuyers have to preregister with his site, offer up an uncharged deposit (onlyto be used in the event of a sale or refusal to complete the transaction aftera winning bid)
and if a bidder wins they are sent thetraditional Ontario Real Estate Association (OREA) offer form within 15minutes.
Thesite’s first property was a condo near Yonge and Eglinton, and when biddingstarted in mid-November, 2017 at first it seemed as though months of planningand
building might have been all for naught.Though 17 bidders registered, the first bids finally came in just five minutesbefore the auction was scheduled to end.
On TheBlock does not reward the fastest click though, the auction extends thedeadline if there are late bids coming in (sellers can set the variable,
but essentially10-15 minutes is added onto the auction after each late bid). After four bids,the condo sold above the buyer’s asking price.
Getontheblock.comessentially sets three prices for a home: an opening number that in the Saginawcase is $1.25-million, an unlisted reserve price below which the buyer reserves
the right to not sell the property, and abuy-now bully offer price that preempts other bids, which is listed at$1.43-million.
If inthe course of bidding the buyers get close to the buy-now number, that optionis removed (so that a buyer is unable to prematurely end an active auction).
Whatthe Steinfelds are trying to fix is the situation where a buyer and a sellerboth miss out on a deal that could have worked if only they knew what the otherparties were thinking.
“I’ve had lots of buyers see the sale priceand say ‘If only I knew I had to pay $5,000 more I would have bought theplace,’ ”
Mr. Steinfeld says, adding that this alsohurts a seller who could have reaped more cash in the sale as well.
InFebruary, the OREA published a white paper on ethics that in part addressed theissues around multiple offers,
going so far as to lay out proposed changesthe 2002 Real Estate and Business Brokers Act (known as REBBA) to allow formore open system of bidding.
“Underthe current system, registrants are not permitted to disclose the contents ofany offer to any other party apart from the seller.
Biddingblind can create suspicion and mistrust, especially if the listing agent hastheir own offer.
In the end, the winning buyer may feel they‘overpaid’ because they were the successful offer,” according to the Pursuingthe
Highest Standards of Professionalism andEthics in Real Estate whitepaper.
“The unsuccessful buyers often feel theydidn’t have a fair chance and could have bid higher if they had known what theywere up against.
If the parties [buyers or sellers] want atransparent multiple offer process, the Act and Code should allow for that withthe consent of all parties.”
Openbidding essentially answers most of those questions, and according to Mr.Steinfeld his site is not in violation of the act because
eachof the auction participants registers with his site and agrees to waive offerprivacy.
“The rule in the industry is the realtor isnot allowed to disclose the substance of a competing offer. We are doing that,I’m not glossing over that,” he says.
“When we did speak to RECO what they did sayis that as long as everybody agrees to it, that’s the caveat to the rule.”
Tomake the auction work buyers must also agree to a standard set of conditions:
Mr.Steinfeld mandated a financing clause and is not allowing for an independenthome inspection (though the company has posted its own).
That does remove some of the non-cash hagglingthat can accompany bidding wars in Ontario, over closing dates and otherissues.
Themodel is closest to one Australia employs, where on a given weekend there canbe thousands of houses sold at auction.
In that market houses that fail to meet thereserve price are pulled from auction, but sometimes buyer and prospectivebidders may continue to negotiate,
something Mr. Steinfeld says the company mightalso attempt if it came to that.
So farthough, selling a detached house in an online auction is still new in Ontario,and while the company has a number of intrigued sellers lining up
(andsome preregistered bidders for Saginaw) a lot is riding on the success of theSaginaw house.
“Iwould not go so far, yet, to say we’re disruptive,” Mr. Steinfeld says. “Wejust want people to feel like they have a choice.”