Blind bidding has been the way of the Canadian real estate market for a long time now, but with skyrocketing property prices creating a housing market that many middle-class Canadians are unable to break into, there has been a push to make the market more hospitable to first time-buyers.
In 2022, the federal government released its budget where Minister of Housing, Ahmed Hussen, was tasked with creating a Home Buyers’ Bill of Rights. A major goal of the bill was to end blind bidding and make housing more affordable. Shortly after, the Ontario government announced it would be creating an “open offer” alternative as part of a reform to the Trust in Real Estate Services Act, 2020 (TRESA) blind bidding practice.
On April 1, 2023, realtor.ca officially launched the Canada-wide rollout of the open offer option.
Since real estate is regulated provincially in Canada, regulations differ across the country. This means the information provided in an open offer will look different from province to province, depending on local rules.
Realtor.ca explains the new option: “In certain parts of the country, you may see specific offer details, like the price on the listing page. In other regions, you may only see the number of offers presented.”
Openn, the company in charge of rolling out transparent bidding on realtor.ca, notes that the process in Canada is unique compared to how Australia and the U.S. run open offers.
“The agent selects the transparency settings based on what is applicable in their province,” says Becky Madden, the head of marketing at Openn. “Transparency settings can include the number of offers, the timeline of the offers, offer values, the number of people watching the property, and unconditional offer flags. They must comply with appropriate regulations and the sellers’ choice.”
While sellers might not like the sound of offer transparency, for now at least, open offers are an option—not a requirement. “Sellers must opt in, and based on my experience working with numerous sellers, there isn’t a compelling incentive for them to,” said Ivan Lobo, a real estate consultant at Made in CA.
“Sellers may still favor the blind bidding system, as it grants them a competitive edge by instilling a sense of urgency or scarcity among potential buyers,” says Lobo.
Critics of the blind-bidding system agree, noting that an optional transparent system does nothing to help buyers. The blind system creates a sometimes-false sense of urgency, driving buyers to place offers well above the offer actually needed to secure the bid.
A transparent bidding system therefore removes the obvious advantage sellers have in driving up the offers made on their home. “They could receive lower or fewer offers compared to what they would get under blind bidding, since buyers might become more cautious or conservative when they can see other bids,” Lobo says.
“This could eventually lead to a more balanced market with fewer bidding wars and less inflated prices.”
There is still no word from Hussen’s office on when the Home Buyers’ Bill of Rights will actually come into law, so until sellers’ hands are forced to show their cards, optional transparent offers are likely to remain a rarity.
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