House hunting this long weekend? One realtor wants to make the process better
Would-be buyers don't know what other bidders are willing to pay, which can lead to inflated prices
A long weekend and warm weather are the perfect conditions for house hunting, but sunny skies won't ward off the bidding wars that have become commonplace in the city.
New listings are down 10 per cent across the city compared to this time last year, and that's helping to drive up real-estate prices. In the last year, the average price of a home in the city has jumped $100,000, according to the Toronto Real Estate Board(TREB).
But high demand and short supply aren't the only factors sending real estate prices soaring. Blind bidding is what's really hurting buyers, says one agent.
"I think in 2016 we should be doing more than guessing how much a house is worth," realtor Andrew Harrild told CBC News.
"That is a system that for me can result in a bubble."
As it stands now, buyers can easily learn what a house is selling for. But the only way to learn the final sale price is to hire an agent who has access to that data. Buyers who put an offer on a property do so without knowing its true market value, or what other buyers are bidding.
That's the position Elizabeth Cai keeps finding herself in. On a recent offer she went $7,000 over the asking price, "which I thought was a lot," she told CBC News.
"When you're going above asking, you're kind of shooting in the dark. You don't know whether you're paying way above market or not."
Harrild has been calling for more transparency in the system in the form of an open bidding process.
'It's emotionally draining'
"So instead of buyer number one being $100,000 over buyer number two, you come to a price that's fair," he said.
Real Estate Council of Ontario registrar Joseph Richer said that the rules governing sales "need to withstand the cycles of the real-estate market.
"Toronto is currently in a sellers' market, but that hasn't always been the case, nor is it necessarily the case in other parts of the province."
But blind bidding is only benefitting sellers, Harrild said, something that Cai knows first-hand.
"It's emotionally draining, because it's your home so you start really investing in the place," she said. "I'm afraid that because of my emotions and how frustrated I am that I'll end up over-paying a lot for a place."
The rules that leave buyers feeling vulnerable are slowly changing.
Last year, real-estate agents were told they had to keep forms showing that properties had multiple bids, and this year, the federal Competition Tribunal ruled that TREB was stifling competition in the market by limiting access to some home sales data.
The tribunal has not laid out how the ruling will change current TREB rules, under which agents only have to provide selling price information to clients.
But the expectation is that Toronto real estate agents will soon be allowed to post online what everyone buying or selling wants to know — the selling price of homes.