According to the latest announcement, the Canadian Real Estate Association (CREA) has ventured into a pilot initiative to provide real-time tracking of bids on REALTOR.ca listings, launching this summer. Real estate technology firm ‘Openn Negotiation’ is partnering with REALTOR.ca to provide a working model and framework to implement and launch this process in Canada. With a proven success record in Australia in the Australian market, it has dramatically benefited real estate. The primary objective is to ensure complete openness in the real estate bidding process, allowing real estate professionals and customers to learn about competing bids on listed properties.
With the goal to help Canadians during their real estate journey, this collaboration project will deliver meaningful complete data insight about listed real estate pieces or properties. Real-Time tracking of offers put on the listed property is the highlight of this project. But if this pilot process is implemented correctly and becomes successful, it can significantly help homebuyers afford a suitable home well within their means.
As witnessed throughout Canadian Real estate history, multiple offer scenarios have become commonplace in existing Canadian real estate buying and selling. Therefore, making it challenging for one buyer to get their hands on the property, increasing competition among potential buyers, thus giving rise to a touch bidding system. Furthermore, there is no way for a buyer to verify if the information provided to them regarding multiple offers is correct in the existing system. All they can know is how many offers they are competing against. Due to a lack of full transparency about other offers, most buyers try to shoot in the dark by coming up with the highest process to win the bidding war. Sometimes in this race of winning bidding, many buyers buy a home or property that is well above their means using illegal approaches.
Moreover, Human bias is a significant hindrance to the existing system. Even though no one wants to talk about it, there have been various instances where the listing agent rigged the bidding process. In many scenarios, listing agents use scare tactics and provide incorrect information regarding current offers to potential buyers’ agents when requested to pressure them and push them to work with their clients to raise the offer price. And it is also not hard to find examples where listing agents favoured buyer agents who greased their palms by providing inside information about other offers and helping them win the bid and buy the listing.
Numerous instances have spawned ideas asserting that implementing such openness resulted in dramatic increases in real estate prices in nations like Sweden and New Zealand. However, as the adage goes, every coin has two sides, and each positive development entails certain drawbacks. And precisely, how this will affect Canadian real estate professionals and consumers is still an open question. All we can home is that it benefits the Housing market in Canada and makes home affordability an achievable goal.
