TORONTO – Toronto’s hot real estate market has its consequences and some say one of them is the way buyers are being forced to pay substantially more for homes than the listed price due to suspect bidding practices.
“I don’t like bidding wars, I think it leaves it open for abuse,” said real estate agent Paul Vallis. “But unfortunately we’re obligated as agents to do best thing for our clients.”
David Fleming is another realtor who has criticized bidding wars.
“Every single day of the week in Toronto someone pays more than they wanted to or what was perhaps fair market value,” said Fleming.
Competition in Toronto’s real estate market has left buyers exposed to inflated prices caused by bidding wars which some say is hurting the industry.
“For most part you’re taking the agent’s word for it that there are other offers out there,” said Vallis.
Unfortunately in some cases, housing prices are being boosted by sellers in what some in the real estate industry call “phantom bids”.
One Toronto realtor claims her client paid $90,000 over the asking price and discovered theirs was the only offer. The realtor declined to speak to Global News.
Bruce Matthews from the Real Estate Council of Ontario says breaking the rules could lead to fines or losing a license. However, without a formal complaint filed, there’s no investigation.
“I don’t think there needs to be greater transparency, I think the nature of the offer process and someone knowing they are in a competitive situation is the key issue,” Matthews explained.
Still many homebuyers agree the number of offers should at least be put in writing, especially since Toronto is now considered one of the hottest ‘seller’s markets’ in Canada.
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