Sweeping new real estate changes come into effect!
In an effort to provide more clarity and choice and maybe restore some consumer confidence in the Real Estate industry new rules for Ontario Real Estate came into effect December 1st 2023.
Open Bidding
Sellers will no long be limited to selling via closed or traditional offer system they will now have the option of disclosing any number of details of competing offers.
Under the current system of “blind bidding” potential buyers submit their offers but do not know the contents of competing bids. The number of offers is disclosed but not the contents of those offers.
Under the new regulations, sellers would have the option to open the bidding process and make all offers transparent. Disclosing details such as offered price, closing date and conditions!
Buyers too will have options – they can add clauses to their offer that limits disclosure or removes their offer from competition if disclosures are going to take place.
Allowing designated representation
To provide flexibility for brokerages and expand consumer choice, brokerages will be allowed to enter into either a brokerage representation agreement or a designated representation agreement with each client at the outset of the client relationship, with appropriate safeguards in place such as measures to protect the confidentiality of client information.
Under brokerage representation, real estate clients are represented by brokerages. Clients may work with a specific real estate broker or salesperson, but they are represented by the broker or salesperson’s entire brokerage. If a brokerage has multiple clients in a single transaction, the brokerage and its staff must treat each client impartially. The brokerage and its brokers and salespersons may not place one client’s best interests over the best interests of another client, even if each client is working with a different broker or salesperson within the brokerage.
Under designated representation, each client is represented by a specific broker or salesperson at a brokerage who would promote their client’s best interests but not by the brokerage. In this scenario, the brokerage remains objective and impartial to clients in the same trade and ensures appropriate safeguards are in place so that all brokers and salespersons fulfil their duties to clients. If a designated representative represents more than one client in the same transaction (with the informed written consent of the clients), the designated representative must remain objective and impartial and may not place one client’s best interests over the best interests of another client
Increased Brokerage Disclosures
Important changes bringing improvements to Brokerage disclosures and new attempts to avoid conflicts on multiple representation transactions also come into effect and will work to make sure the public is well informed of their options. There will be more paperwork, but with that hopefully more clarity. Clearly outlying the options consumers have such as self representation and their own involvement throughout any real estate transaction.
Summary
In the past government involvement in large sweeping measures has missed the mark. It is too early to tell what effect these new changes will have.
The intent from the Government is to bring in these new regulations to help to make the home buying process more transparent, but some critics disagree, saying the rules could add confusion and will do little to bring down inflated prices.
In my opinion anything that brings more clarity and transparency to the industry is welcome and these new changes will bring BIG OPPORTUNITY for consumers that choose experienced Realtors to help them navigate these new changes.
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