OREA Wants To End Bully Offers To Level Playing Field For Home Buyers
The Ontario Real Estate Association (OREA) wants to ban bully offers to level the playing field for all home buyers.
The recommendation was just one of 28 put forward by the association for the government to consider during its review of the Real Estate and Business Brokers Act (REBBA), which was implemented in 2002.
A bully offer is one that is made preemptively, ahead of a seller’s offer date. Not only does this put pressure on sellers who have a limited time to accept the offer, but also makes the system unfair to other buyers, who have not yet had a chance to put in their bid.
Banning bully offers “will ensure that all interested buyers of a particular home get a fair shot at making an offer,” OREA president Karen Cox said in a news release. “For sellers, it means they will have a chance to work with their Realtor to carefully and thoughtfully consider all offers without feeling like they are in a pressure cooker.”
That’s not the only recommendation the association made to protect consumers. In addition to banning bully offers, OREA is also calling for escalation clauses to be banned. These are beneficial to buyers when there are competing bids on the table. These clauses state that the buyer will pay a specified amount above the highest offer, and it will usually have a cap.
Again, this makes the process of buying a home unfair for many (not to mention unaffordable).
OREA — which represents 78,000 brokers and salespeople — has also asked for more training programs to elevate professional standards and for more power to be given to the Real Estate Council of Ontario (RECO) to hold agents accountable for any breaches made under REBBA and/or the Code of Ethics.
Here is the full list of the association’s 28 recommendations:
- Let consumers choose the real estate professional they want to work with
- Keeping home owners in the driver’s seat when it comes to transparency
- Fair tax treatment for real estate professionals
- Cut real estate red tape on real estate brokerages
- Reduce the phantom offer paperwork burden
- Say “no” to Travel Industry Council of Ontario (TICO) double registration
- Review term limits for buyer and seller contracts
- Replace the term “salesperson” with “agent”
- Replace the term “registrant” with “licensee”
- Fee increases on registrants – make it the Minister of Consumer Services’ call
- Greater transparency for the regulator
- Create an internal RECO ombudsman
- Specialty licensing classes for registrants
- More brokerage mentorship of students in the articling phase of their education
- Stand-alone specialty courses for new registrants
- Tougher final exam
- Implement pass/fail for continuing education
- In-class exams for continuing education
- Ensure a fair offer process
- Prohibit the use of escalation clauses
- Eliminate the two-tier system of consumer protection
- Protect consumers against unlicensed operators
- Implement a “cooling off” period for license revocations
- Remove barriers to RECO using investigative powers
- Give RECO discipline committee suspension/revocation powers
- Kick violent or fraudulent offenders out of the business
- Eliminate the financial incentive for bad behaviour
- Allow administrative monetary penalties to be used for minor infractions