The group representing Ontario's real estate agents is considering urging the provincial government to allow a transparent bidding process for home sales as part of several proposals to improve the industry's ethics and reputation.
The Ontario Real Estate Association (OREA), which issued a discussion paper seeking input from its members on Thursday, has been promoting higher standards in light of concerns raised about unscrupulous practices in the province's overheated real estate market in recent years.
Advocates of bringing transparency to real estate say it would curb mistrust and prevent buyers from wildly overpaying. Under such a process, which would be optional, all prospective buyers would know what the other parties have offered, similar to an auction.
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However, everyone involved – the seller and all bidders – would have to consent to an open process, which OREA acknowledged might be unlikely. Current rules prohibit real estate agents from disclosing the contents of offers to other parties with the exception of the home seller.
"Every party has to agree and that's easier said than done," said Ettore Cardarelli, president of OREA. "Sellers may be very reluctant to have any of their private information shared, so that may not happen. But this is a question that we're putting to our members: Do you want it? Do you not want it?"
The discussion paper is the latest the organization has released in relation to the provincial government's consultation process to reform the Real Estate and Business Brokers Act, the 2002 legislation that governs the real estate profession.
Other proposals OREA is considering include:
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- Requiring the industry’s regulator, the Real Estate Council of Ontario (RECO), to make its registry of realtors more user-friendly and comprehensive so that it includes all information about individual agents’ disciplinary infractions;
- Streamline the rules so RECO would be in charge of all disciplinary matters;
- Requiring salespeople who work for developers and builders to be registered as realtors;
- Allowing RECO to levy administrative monetary penalties for minor infractions so investigators can focus on more egregious ethics breaches, which OREA says would be more efficient than going through the disciplinary process;
- Require realtors whose registrations have been revoked to wait two years, instead of the current one year, before applying for re-registration;
- Automatic no-show penalties for realtors who fail to keep appointments to tour homes.
In a statement, RECO said it has long advocated for some of the same proposals, including a streamlined enforcement process and administrative monetary penalties for minor infractions. It also said it is reviewing its public information policy.
OREA's consultation process will wrap up in late March and the group plans to make its submission to the government in September.
The Ontario government announced a two-stage review of the act as part of its 16-point Fair Housing Plan unveiled last spring in an attempt to cool the province's housing market and improve regulation. The first phase focused on multiple representation, a situation in which a realtor acts for both seller and buyer, also known as double-ending, while the second is a broader review of the legislation.