Tuesday, February 2, 2016

Growing Trends for 2016 Real Estate: Bill 55

With the red hot real estate market we’ve had in Ontario for the last several years, inventory has been low, demand has been high, and bidding wars have become a normal occurrence. In these market conditions, buyers can sometimes feel helpless and end up paying more than they otherwise would’ve in a more balanced market. This has translated into some situations where buyers have complained about competing with “phantom” offers, or when a listing agent says they have another offer(s) and doesn’t, or doesn’t have as many offers as stated.

This activity has led to the creation of Bill 55, the Stronger Protection for Ontario Consumers Act. Rumor has it, it was created by an MPP that had a bad experience buying real estate in a similar multiple offer situation. Here is what you should know about changes Bill 55 has brought about:

  • Offers must be made in writing. Please keep in mind that a written offer must be signed to be valid.
  • A registrant cannot indicate that they have an offer unless they have a written offer.
  • The seller’s brokerage must keep a record of all written offers that it receives.
  • Unsuccessful offers must now be kept for at least one year. Successful offers will continue to be kept for at least six years.
  • Consumers and registrants who placed an offer on a property may contact RECO to confirm the number of offers that were received.

So these changes were put into effect to protect buyers in multiple offers situations. In our opinion, this isn’t the best way to do this, as all the remedies for the buyer are after the fact. We’ve seen this situation addressed in offers, with a clause created by prominent Ontario Real Estate Lawyer, Mark Weisleder:

“This offer is being submitted on the basis that it is part of multiple offers. If the seller receives no other offer by 10 pm, the seller will notify the buyer or the buyer salesperson and the buyer will have 1 hour to revoke or revise their offer.
If the seller accepts the buyer offer, the seller will provide, within 24 hours, the name, address and phone number of the salesperson and brokerage company that submitted the competing offer.”

So there you have it buyers. Next time you are in a multiple offers situations you know your rights and what to expect.

Have you been in a bidding war and if so how was your experience?

Russel Lalovich
Office: (519) 966-0444
Cell: (519) 995-5620

1 comment:

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