To The Pointwith Boris Bozic
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3 Comments Bidding Wars – An Easy Fix

Article written by Boris Bozic on the 28 Mar 2014 in Mortgage

I wonder if purchasers who went through the bidding process would do it over again?   We’ve all made bad business decisions, it happens.
But if the purchaser feels like they were played, well, that’s not good for any of us.  The integrity of the real estate sales process is sacrosanct.

I assumed that real estate bidding wars was specific to pockets in the Vancouver and Toronto market place.  You know? Big home values, big incomes – the bigger-better syndrome.  Alas, my assumptions were incorrect.  I made a stop in Winnipeg a few weeks ago to meet with some of our broker supporters, and I was surprised to hear how prevalent bidding wars are in the Winnipeg market place.  I guess I shouldn’t be surprised, given the Globe ran article recently about what to do if you find yourself in a bidding war.  People on the front lines are talking about it, and Canada’s self-proclaimed National newspaper is providing advice on what to do if you find yourself in real estate auction.  I’ll assume that real estate bidding wars are no longer a one off or the exclusive domain of larger urban centers.

Should we care? I think we should.

Some would describe real estate bidding wars as the free market economy at work- a willing seller and a willing buyer.  The flip side of the definition is; the manipulation of the real estate process, predicated on an unsuspecting and uniformed buyer.  An argument can be made for both definitions.  Here’s where I stand -

I think it’s an unseemly practice, and should be stopped or at the very least an attempt should be made to curtail it.  Here’s how it works, the real estate agent convinces the vendor to list their property for slightly less than market value.  The listing states that no offers will be entertained for a period of time, somewhere between five to seven days.  Enough time is given to view the property, and hope that perspective purchasers, especially those who are frustrated and disillusioned because they’ve done this a number of times and have no home to show for it, will submit an offer on the prescribed date.  The hope is the offer will be based on emotion, excuse me…market reality, and over pay.  And that’s what’s happening with greater frequency today.  I often wonder if purchasers who went through this process could do it over again, would they?  We’ve all made bad business decisions, it happens.  But if the purchaser feels like they were played, well, that’s not good for any of us.  The integrity of the real estate sales process is sacrosanct.

The best way to ensure that the integrity of the real estate sales process is not questioned is by way of transparency.  The Competition Bureau’s attempt to have CREA (Canadian Real Estate Association) publish the historical sale price for the listed property, is a step in the right direction.  CREA is fighting this because of “privacy” legislation. I find that interesting given that the information is already public, and one can find it if they have the time, and know where to look.  Finding historical sales data shouldn’t be laborious or treated as tradecraft.  We live in an age of instant information, and there’s no conceivable reason not provide this information to purchasers, and existing home owners.  If you want an example of how this can work, go to  On this website is the listing of every property there is for sale in the U.S. It also provides estimated property evaluation, and historical sales activity for all properties.  It would be a valuable tool for anyone finding themselves in a bidding war.  If a realtor councils perspective purchasers to go in at “x” dollars, the council can be judged and validated as quickly as the purchaser can tap his/her tablet.  Transparency and information assists the purchaser to make a better decision.  A home is shelter, it’s also the biggest single investment decision that most people will make in their lifetime. 

There’s a self-serving reason why I would like to see theses bidding wars come to an end.  If the purchase price of the home is over market value, the appraisal is not going to come in.  That’s the point when everyone who was party to the over inflated purchase price runs for the hills, and start blaming those who are left to try and fix it, the mortgage broker and lender.  Rather unjust.

Oh yeah, my quick-fix solution is this, the mortgage amount is based on the purchase price or appraised value, whichever is lower.  We should add the listing to that as well.  That would pretty much end the gaming of perspective purchasers.

Until next time,



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First of all, I want to say that I always enjoy your blogs.
Second…I am in Winnipeg. The bidding wars have been here for many years. Here in Winnipeg, we do not have enough inventory for our growing market. The majority of REALTORS are trying their best to make sure our clients are not paying more then the property is truly valued at in this market. They are listed at fair market value and still get bidded over and above expectations. WREA is also very protective over this behavior and has set very stern standards to try and protect the consumer. This anomaly is not driven by our Realtors and sellers greed but by the market itself. If they tried to have it on a first come first serve basis as in times of a more balanced market, then it would be an unfair advantage to someone who can get the offer from their Realtors desk to the listing Realtor fastest. WE would still have multiple offers trying to win a race of time instead of money. I believe that currently, in our market, this is the fairest way to have a home sold and purchased. Any advantage obtained by the seller is given up when they in turn are in the bidding situation for their purchase. Are there times when a consumer is overpaying ? Possibly? But we will only know the answer to that when our market becomes more balanced and these home are now being resold.
My opinion …

what better way to get fair market value in a sellers market than having your home on the market for a minimal set period of time prior to reviewing offers!!!

thats why it is called a “SELLERS MARKET”

I would call this effective marketing and compliment any realtor representing his seller using the strategy..

David Smeriglio @soldhabit Website Reply


The feeling of these article suggests that Realtors council buyers into overpaying and this is in part allowed because historical values are not openly available to the consumer. I strongly disagree with this. The role of the Realtor is to council their client exactly what they are purchasing, at what potential price based on the availability of inventory, relative condition of the home, and other market factors which contribute to pricing at that moment in time. The buyer, based on their financial situation, and based on their circumstances and experience decide what to do with that professional information.

Buyers should be signing a Buyer Agency Agreement. This document protects them against unscrupulous agents because it obliges the Realtor to behave in a manner set forth under the agency and representation lawful requirements of of the Real Estate and Business Brokers Act. It also affords them protection under the agents mandatory errors and omissions insurance.

I doubt that an experienced agent who has built a business practicing Real Estate would jeopardize their careers and reputations by willfully lying about a particular home price; especially since the buyer can obtain this information if need be, albeit at a cost up here in Canada.

Realtors do not create ‘multiple offers’ , the market does. No agent like multiple offers and hope for them. I have seen overpriced houses sell in multiple offers and the final sale-price is far less than list despite multiple offers: When inventory is low, and the house has value, there are multiple offers no matter what the price.

The buyer should do their homework when choosing and agent. If CREA and OREA are guilty of anything, it is not raising the bar for minimum requirements for becoming an agent, thus flooding the market and opening itself up to unethical individuals practicing Real Estate. (my opinion) .

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