Area real estate agents not sold on new real estate legislation

New real estate rules, implemented last month, may provide more transparency during the bidding process often involved in the purchase of a home.

Previously, the “blind” bidding process didn’t allow for relators to reveal bidding information to prospective buyers. The Trusted in Real Estate Services Act now provides sellers an option to reveal information about the offers they get.

Jack Latimer, a long-time Orillia real estate agent with RE/MAX, says the new law offer pros and cons.

“A couple of years ago when real estate was going totally crazy, people were putting in all kinds of offers in way above what they may have got the house for if they knew what other bidders were putting in on the home,” he explained.

In some cases, buyers were putting in bids for $50,000 to $100,000 over the asking price when the second bidder below them might have only been $25,000 over.

“In a sense, this does help the buyer because they can know what the other party is bidding,” Latimer said. “It may eliminate them from putting in too high of an offer when they can get the house at a price they would accept.”

Buyers also now have the option of keeping their bid private, which Latimer says can defeat the whole process.

“Buyers may still go well over the price because of one buyer not wanting their information to be revealed,” he said.

Latimer says it’s going to take some time for real estate agents to work out the “bumps in the road” of the new process.

“I don’t think the experts who put this together are fully aware of everything that is going to materialize,” he said. “I think there is going to be some smoothing out of it over time.”

Latimer says most sellers will feel that they can get a higher offer without the open bidding process. However, in a slower market, it may be a good idea to reveal bids to get the process moving.

“I see the benefits of it,” Latimer said. “I also see a lot of problems with it as well.”

The reason for the new law comes from buyers paying “way too much” for their homes over the last few years, he explained of the genesis behind the new rules.

“It’s to protect buyers and, in some cases, sellers,” Latimer said. “It’s a good thing in aspects, but there is a whole lot to still be learned about this process.”

Latimer believes it’s going to take some unfortunate mistakes to help smooth over the laws.

“Some seller is going to reveal all offers when they could have got more if it wasn’t revealed,” he said.

Latimer doesn’t believe the new laws will do anything to help with the current housing crisis. That issue is about supply and demand and interest rates.

“Real estate prices of homes really haven’t fallen a huge amount,” Latimer said. “Some people think the sky is going to fall, and realistically, I don’t really see a lull.”

Latimer says we’ve moved into a more balanced…