Review of Blind Auction in British Columbia Real Estate Market to Analyze Rules Elsewhere

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The provincial government is expected to study other real estate markets and their bidding practices, such as blind bidding and automatic increase clauses, before presenting new real estate legislation for BC this spring.

The Finance Ministry said it will ask market and consumer experts to consider alternatives and how bidding practices work elsewhere.

During the federal election campaign, ruling liberals spoke about implementing a national blind bidding ban, whereby home sellers would have to tell buyers exactly what dollar amount competing bids were willing to pay, and the requirement would be linked to an amendment to the law. Criminal Code.

But the talk has given way to the realization that real estate regulation ultimately falls under the supervision of provinces and territories, which already have slightly different approaches.

On the possibility of changes to the blind auction, the British Columbia Ministry of Finance said it understands “people’s concerns about the process. It is also important to note that it is a long-standing practice that is used throughout Canada. “

The number of other offers is an indication of demand, but Powell also said it may have its limits in a hotter market.

“In the past, let’s say five, six or 10 years ago, we used to have a rule of how the bids can match how much is going to exceed the asking price, but that’s out of the window now,” he said. . “We used to joke that every offer means another 10 big ones to ask for, but it’s been a few years since that’s almost relevant. The only time it is really useful (to know the number of other offers) is when you are the only offer or if there is another offer. “

Still, he said, “If I know there is only one other offer, or no other offer, that would very well change the amount that I have my buyer willing to pay, compared to if there are 15 other offers. If there are 15 of them, you better put your best foot forward. “

Another option is the use of an “automatic increase clause”, a mechanism found on most online auction sites that allows you to bid in set increments. Buyers would still submit their maximum bid, but the winning bid would simply outperform the next highest bid by a reasonable, set amount rather than a very wide margin.

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Reference-vancouversun.com

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