Ontario Realtors Urge Government To Ban Pre-Emptive ‘Bully’ Offers

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Ontario realtors are urging the government to stop “bully offers,” a practice of making pre-emptive offers on homes that gives some buyers an unfair advantage, according to a statement from the Ontario Real Estate Association (OREA) on April 8.

The OREA released their report Vision for a Modern REBBA: Getting to the Highest Professional Standards in North America on April 8. The report outlines 28 recommendations for modernizing real estate rules and ensuring that realtors have high standards and proper training. An offer made before the offer date on a home listing is known as a pre-emptive or “bully” offer and the OREA is pushing for a ban on the practice to increase fairness in the home buying process. In addition to bully offers, the report looks at other real estate issues such as disgorgement and escalation clauses.

Karen Cox, OREA President, said banning bully offers will ensure that all interested buyers of a particular home get a fair chance to make an offer and that sellers will be able to consider offers without “feeling like they are in a pressure cooker.”

The OREA is also calling for disgorgement in situations where real estate salespeople breach REBBA, which would force rule breakers to pay back income made through unethical means. In the report, the association also addresses escalation clauses, which is a provision that buyers can use to beat competing offers by automatically topping better offers with a previously stipulated amount. Cox said the practice makes for an uneven playing field.

“Further, for the escalation clause to kick-in, a realtor must reveal private financial information such as the highest offer on a home to the buyer using the clause, which violates the Realtor Code of Ethics,” Cox said. “Eliminating contradictory rules like this will strengthen consumer confidence in the Province’s real estate market.”

To view the OREA’s Vision for a Modern REBBA report, click here.

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