An article in the Toronto Star this weekend highlights one HomeBuyer’s experience competing in four bidding wars (multiple offers). Sandro Contenta voices what Realosophy feels is amiss with the current multiple offer process—namely, a lack of transparency and the diminished consumer protection that results.
The multiple offer process was a key issue in the Toronto Real Estate Board’s recent election, an issue which divided the two candidates running for president-elect.
Michael Manley of Prudential Properties Plus felt that the current multiple offer process is hampered by a number of problems. Mr. Manley stated that one of the core problems with the current system is the issue of fake (or phantom) multiple offers. The lack of transparency in the multiple offer process means that it’s almost impossible for a HomeBuyer to know if more than one offer is actually being presented for a home. To address this issue, Mr. Manley proposed to develop a fair offer system that would reign in unscrupulous practices.
His opponent, Maureen O’Neill of Bosley Real Estate, felt that the problem had been overstated, noting that in her 27-year career, the election campaign marked the first time she had ever heard of a phantom offer. On June 15th, Toronto realtors elected Ms. O’Neill as president-elect.
The results of the election suggest that realtors are more comfortable with Ms. O’Neill’s protective stance rather than Mr. Manley’s call for change. Clearly, many realtors are uncomfortable with criticism, often a necessary precursor for change: identifying problems with the industry, the common notion goes, is bad-mouthing the industry. I have always been fascinated by the disconnect between what realtors think an insider critique does to their industry (harm it) and what it actually does—restore consumer faith in an industry beleaguered by bad news stories epitomized by Mr. Contenta’s experience.
The industry is being confronted by profound changes in the marketplace today. To my mind, there are two key drivers of this change: technological progress and consumer expectations. Today’s HomeBuyers are more connected, more educated and more informed than ever before. In exchange for their loyalty, they expect honest, timely and open communication from the businesses they connect with. Transparency is the currency of today’s market. Realtors will need to learn that it’s ok to say that our industry isn’t perfect—but then, no industry is without the need for vigilance. What hurts us most is not the suggestion that the multiple offer process may need fixing, it is being afraid to recognize where we could stand to serve consumers better.
John Pasalis is a sales associate with Prudential Properties Plus in Toronto and a founder of Realosophy.