An open offer pilot program set to launch across Canada this summer will not only provide buyers with increased transparency in real estate transactions, but will strengthen protection for buyers purchasing at auction in Ontario and Manitoba.
The pilot, launching thanks to a partnership between the Canadian Real Estate Association (CREA) and Australian property technology company Openn, would see real-time offer tracking show up on a property’s REALTOR.ca listing page. Although the pilot drew attention for its expected effect on traditional real estate sales, Openn says that its technology can provide enhanced consumer protection for auction sales as well.
In Canada, most provinces have a regulatory system in place to oversee the activities of auctioneers. In Ontario and Manitoba, however, this regulatory framework does not exist -- something Openn says often leads to auctioneers selling properties without a license or experience, putting homebuyers at risk.
“Real estate is a rapidly expanding and evolving industry that requires greater transparency, equality and efficiency,” said Openn North America Director of Operations Eric Bryant. “With that, we are seeing auction companies across Canada emerge and in provinces, such as Ontario, there continue to be regulatory loopholes in the property auction process that pose consumer risks. We believe our technology supports transparency at every stage of the real estate transaction, and Openn is looking forward to bringing that technology to Canada to help solve these consumer challenges."
Openn's software requires that all offers be submitted by a licensed real estate professional, meaning these unlicensed auctioneers would be excluded.
“With our six-plus years in the Australian market, we have seen that the combination of regulated and licensed real estate professionals, qualifying buyers, and a digital audit trail not only mitigates risk but delivers legitimacy to the real estate transaction and builds consumer confidence,” Bryant said.
CREA announced the pilot program back in April, and although a launch date has not yet been set, CREA and Openn are eyeing Canada’s two largest markets as the first places they’ll roll it out: Ontario and British Columbia.
“We’d like to start where there is the best overall type of transactions and variety of transactions,” Bryant told STOREYS last month. “It looks like that can be accomplished with a couple of more agreements.”
When it does launch, the program will have various levels of transparency, allowing sellers to choose just how much or how little information they make available. Sellers will not be required to reveal the offer price amounts on their property, but they will have the option to do so. Although Bryant says he expects to see a more limited amount of the transparency features used when the pilot first launches, he believes that will change as time goes on and buyers become more and more interested in increased transparency.
“I can almost promise you that two years after we start using the product, you’re going to see a move to full transparency because, ultimately, the consumer is going to let the professional know exactly what they want and they’re going to go find it just like they went and found Ubers over taxis and just like they went to Amazon over Barnes and Noble,” Bryant said.