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May 25, 2022
What you need to know when you are making an Offer on a Property.
Should Canada be banning Blind Bidding in Real Estate? Maybe altering it may be the answer.
Let's first start out by explaining what Blind Bidding is. Blind Bidding is what goes on in Multiple Offer Scenarios in Real Estate otherwise known as Sealed Bids (like when municipalities Sell homes that are behind in their taxes). Nobody knows the terms and conditions of any of the other offers, thus we are all "Blind" when we are Bidding (Putting an Offer in) on a Property.
Banning Blind Bidding is a mistake because there are other important factors in an offer that can't be discussed in a driveway or flea market when you are having an Auction or an Open Bid System. Negotiations can be very difficult to perform and negotiate. Other factors such as Closing Date, What is included in the House Purchase, Conditions such as Home Inspection, Mortgage Approval, Appraisal etc are just as important as the Price.
In fact, Sellers have accepted less money on the offers on their home because they were more agreeable to the other terms of the offer. Do I disagree with the winning bid being $50,000 or more higher than the Second place offer? Yes. I feel there are ways that we can alter the process in a Blind Bidding Scenario. For Example, with any competing offers being equal/acceptable in the other terms besides price,
Insert a rule that the Winning Bid cannot be more than $10,000 more than the Second Place Offer. This is done in other businesses as well. Just that we see it in Real estate far too often.
Check this Article and let me know what you think. Click HERE
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