A planned open offer pilot program that would allow Canadian homebuyers to see all registered offers placed on a property will also allow sellers to choose just how much or how little information they make available.
In April, the Canadian Real Estate Association (CREA) announced that it is gearing up to launch the pilot program which would see real-time offer tracking show up on a property's REALTOR.ca listing page. To accomplish this, they're partnering with Australian property technology company Openn who have seen success creating an open offer system in Australia.
Although an official Canadian launch date is still in the works, Openn's Director of Operations for North America Eric Bryant offered some insight into what Canadians on all sides of a property transaction can expect. Firstly -- and perhaps dispassionately for those hoping for total transparency -- sellers will not be required to reveal the offer price amounts on their property, but they will have the option to do so.
"It is at the discretion of the seller and the listing agent as to whether they want to have full transparency, which would include the dollar amount of each of the offers, or whether they'd like a little less transparency and simply show the hierarchy or the ranking of the offers," Bryant said.
Although he expects to see a more limited amount of the transparency features used when the open offer pilot first launches, Bryant 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.
Canada's real estate markets have been plagued with cut-throat competition, fierce bidding wars, and runaway prices over the past two years. And, although that has started to slow in a number of markets, many people have been left feeling burned by the process. But it's not just homebuyers who have pushed for open offers in response to market conditions. In fact, just one day before the CREA announcement, the federal government announced its intention to ban blind bidding Canada-wide in the 2022 Federal Budget.
But the CREA project has been in the works for quite some time, Bryant said. After coming on board in the fall of 2021 to lead the North American expansion -- initially expecting that expansion to take place in the United States -- Bryant says he was contacted by CREA Manager of Industry Development Rob Reyner and Business Development Head Andrew Jackson to begin conversations about bringing the platform to Canada.
"In most cases, when it comes to the technology, the US begin the process Canada follows," Bryant said. "In this case it's the opposite."
There's been some push back against the idea of banning blind bidding, particularly from those in the real estate industry. But Bryant says that the Openn software will increase efficiency for brokers and agents by digitizing and centralizing the entire offer process.
"By placing offer and acceptance in the software, we're creating a much more efficient ecosystem for the offers and counteroffers to take place," Bryant said. "Not only is it done much faster, but it's done in palm of your hand, if that's what you want, on any type of mobile device. It can be done 24/7, 365."
For consumers, he says, it will bring back a sense of trust in the real estate transaction process knowing that everything is being tracked and made visible. After rolling out their platform across Australia six years ago, Openn has since found that its increased usage has been driven by a push from consumers. Bryant says he expects that demand to outweigh agent skepticism in Canada.
"I think it's going to be a lot like what happened in Australia: the consumer is going to drive the adoption," Bryant said. "The agents are going to be slow to it because there's some skepticism on their part because it's a big change. Even though it's the exact same process, it's done electronically now so there's a certain amount of control that feels like it's slipping away. But as we as we live our lives in 2022, there's so much more that we do online."
The program also requires that all offers be submitted by a real estate agent, meaning consumers cannot represent themselves or submit offers on their own -- something Bryant says will allow buyers to know that the other offers they're "going up against are legitimate."
As exciting as the change may be for some, there's one glaring question that needs to be answered before the CREA pilot can launch: How will it be allowed in every area of the country? That's because in Canada, each province and territory has their own varied rules and regulations when it comes to open bidding. In Ontario, for example, the Real Estate Brokers Act prohibits realtors from revealing the dollar amount of competing offers, but requires they reveal how many other offers there are. In British Columbia, on the other hand, buyers must rely on a selling agent’s willingness to reveal how many other offers they’ve received.
"It's made it a little bit more difficult to integrate, but we are adjusting to it," Bryant said.
Through a number of agreements being put in place that will allow them to launch, Openn and CREA are eyeing Canada's two largest markets as the first places they'll try the pilot: Ontario and British Columbia.
"We'd like to start where there is the best overall type of transactions and variety of transactions," Bryant said. "It looks like that can be accomplished with a couple of more agreements."
Despite the current rules, the open offer project has already received support from the Real Estate Board of Greater Vancouver, with CEO Jeff King saying at the time of the CREA pilot project announcement that they "are excited to participate in a 'by realtors for realtors' solution that provides equality of access to information and facilitates increased transparency for the consumer.”
