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Recent Blog Posts

Over the last couple of years, blind bidding has become one of the more controversial practices emanating from the Canadian real estate market.

This is a practice where homebuyers bid on a residential property listing without knowing what the competing offers are. While it is most common in the major urban centres, blind bidding has migrated into Canada’s smaller markets as well.

For example, suppose five hopeful homebuyers are presenting blind offers. Each bidder has no idea what amount or conditions their counterparts have proposed. The sellers will approach two bidders and ask if they would be willing to increase their offers. They then make a higher bid with the hope of their offer being accepted to complete the transaction. At the end of the day, the winning bidder could be offering $100,000 more than the other bidder, and perhaps well over the asking price.

Critics purport that this has measure contributed to the meteoric rise in home prices, particularly when demand outpaces supply. They add that blind bidding has eroded transparency, making it more challenging for anyone to enter into home ownership. But defenders of blind bidding argue that blind bidding is a development that was born out of the open market during the COVID-19 pandemic.

What’s the truth? Here are the pros and cons of blind bidding in the Canadian real estate market.

The Pros and Cons of Blind Bidding

PROS

#1 Saves Time for Both Sides

Buying a home can be a long and stressful process. As a buyer or seller, you want the deal done as soon as possible. Blind bidding can help streamline the entire affair because the owner will review all the offers at one time without additional changes, meaning fewer appointments. Sellers can merely eliminate lowball offers. This can be helpful in a myriad of ways for both parties.

#2 Second Thoughts?

When you are blind bidding, you can essentially back out of the home-buying process if you decide again buying. This, of course, primarily applies to Ontario since the provincial government recently made changes to the rules and regulations. Still, the same idea applies: if you do not like the home, you can walk away.

#3 Buyers Can Win Immediately If They Have the Cash

Indeed, the person with the highest offer will secure the home. This is beneficial to a bidder who possesses the capital or borrowing amount to place a bid as high as possible for their dream home. Whether the home is being listed for $405,000 or $4.05 million, if a higher bid is within your budget, your odds of winning the property will increase immediately.

#4 Bidders Don’t Share Too Much Information

One of the advantages of blind bidding is that bidders do not share too much information, especially since additional details might force the seller to reconsider your offer based on your circumstances. Blind bidding allows you to make an offer and then wait for the thumbs up or thumbs down.

CONS

#1 Removal of Purchase Conditions

Unfortunately, too many people have eased their conditions in today’s red-hot real estate market. In other words, in a desperate attempt to buy the home, bidders will abandon a home inspection or appraisal. They are willing to make the most significant investment decision of their lives without determining if the home they are acquiring is a money pit that has damage to the foundation or mould in the walls.

#2 Buying and Selling Turns Into an Auction

When blind bidding is removed from the equation, the bidding process will turn into an open auction, with all the interested parties engaging in a potentially bitter dispute to buy.

#3 Lots of Speculation

Blind bidding can fuel speculation. When bidders are aware that this is a prevalent phenomenon and understand that offers will be made well above the asking price, prospective homebuyers might make the mistake of automatically making an extremely high bid. This highlights the fact that every bidder can benefit from working with a real estate agent!

Is Blind Bidding Coming to an End?

Time will tell if the practice of blind bidding will be eliminated. For now, it is still an integral part of the Canadian real estate market. While it does have its disadvantages in today’s chaotic real estate market, blind bidding may moderate into something more rational, conservative and beneficial once the market calms down and buyers are less susceptible to the fear of missing out. Like everything else, blind bidding has its pros and cons, but it will be left up to the people to engage in this practice.

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With spring swirling in the air, it’s as if all of humanity has been brought back to life. For many, the start of the spring season means that it’s time to do a significant clean around the house. After months of being cooped up inside, practically everyone is looking forward to getting outside to enjoy the fresh air and sunlight. While it is common for people to purge their unneeded, unwanted clutter at the end of winter, things often get forgotten. Here are eight important things that should be included on every homeowner’s spring checklist this year.

Examine the Roof

During the winter months, the roof of your home takes a beating. After months of heavy snowfalls, wind storms and ice build-up, your roof shingles may be in need of some attention. Hire a professional to climb up onto your roof and do an inspection. Check if any shingles are missing, cracked, buckled, or if they are beginning to curl. Shingles that have any damage at all should be replaced. If it looks like you have more than just a few shingles to replace, it may be time to start budgeting for a new roof before next winter.

Clean Out the Gutters

While we are on the topic of roofs, check out the gutter situation. The gutters on your house should be cleaned at least annually to prevent clogs and damage. The best time to do it is in the late fall after the leaves have fallen off nearby trees. Winter storms tend to cause plenty of debris to fly around, and some of it could be lodged in your gutters. Getting this done again at the beginning of the spring season will set you ahead of the curve when it comes to summer storms and help improve the health of your roof. 

Inspect the Attic

Next, make your way up to the attic. Check for moisture, mould, water damage, or signs of any pesky critters living up there. Build-up of moisture could lead to significant damage if left undetected, and it is also a sign that you may need to get your roof inspected.

Thoroughly Investigate the Basemen

After going up, it’s time to head down to the basement. Look for similar things as you would in the attic. Basements are more prone to issues such as water and moisture damage, especially as the seasons change. While you are down there, check for any cracks or signs of leaks in the foundation. Check out the sump pump and windows to ensure they are all sealed properly.

Inspect the Air Conditioning Unit

As the temperatures rise, it’s only a matter of time before you decide to turn on the AC to get some relief on those hot summer days. Make sure you do a thorough inspection of the AC unit, or hire a professional to do this for you if you’re unfamiliar with the required maintenance. The beginning of spring is a great time to change the filters and call in to have the unit serviced if needed.

Fence and Deck Maintenance

With all the snow and ice melted, it’s time to inspect your fences and deck. Check for cracked boards or panels, and make a plan to replace them if needed. It’s also good to check under the deck for signs of rodents or other pests that could have taken up residence during the colder months.

Spend Some Time on the Lawn

No one’s grass looks great after a long, harsh winter. Spend some time this spring tending to your front and back lawn. This could involve spreading grass seed or creating a better drainage system to eliminate water pooling, which is unpleasant to walk in and creates mosquito habitats.

Top to Bottom Interior Clean

Finally, we recommend doing a thorough top-to-bottom clean of your home’s interior. Clean out the fridge and kitchen cupboards and put all your winter wear away into storage. After all, lightening up your home and decluttering it will only add to the peace of mind that usually comes once the spring weather hits.

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Ontario real estate is more expensive, and thus, less attainable than ever. In an effort to cool the hot housing market, the Ford Government has increased and expanded its foreign homebuyer tax, effective today.

The Non-Resident Speculation Tax (NRST) first took effect in 2017 as a 15-per-cent tax applied to properties within the Greater Golden Horseshoe Area that were purchased by foreign nationals, foreign corporations and taxable trustees. Starting on March 30, 2022, the tax will impact foreign-purchased properties province-wide, at a higher rate of 20 per cent.

The change comes as part of the Ford Government’s action plan on housing, aimed at tackling the affordability crisis. The Province said the tougher NRST rules are intended to “strengthen efforts to deter non-resident investors from speculating on Ontario’s housing market and help make home ownership more attainable for Ontario residents.”

“Young families, seniors and workers are desperate for housing that meets their needs. But a lack of supply and rising costs have put the dream of home ownership out of reach for too many families in the province,” Peter Bethlenfalvy, Minister of Finance, said in a press release. “That is why our government is adopting the most comprehensive Non-Resident Speculation Tax in the country. Our government is working to increase supply and help keep costs low for Ontario families and homebuyers, not foreign speculators looking to turn a quick profit.”

But aside from deterring non-residents from scooping up listings, real estate industry insiders maintain that building new homes is a key part of the supply solution—such as the recommendations put forth by the Ontario Housing Affordability Task Force calling for 1.5 million new homes to be built in the province over the next 10 years.

“Hard-working Ontarians are facing a housing crisis. For many years, the province has not built enough housing to meet the needs of our growing population. While the affordability crisis began in our large cities, it has now spread to smaller towns and rural communities,” the Task Force wrote in its report released in early February. “Efforts to cool the housing market have only provided temporary relief to home buyers. The long-term trend is clear: house prices are increasing much faster than Ontarian’s incomes. The time for action is now.”

Christopher Alexander, President at RE/MAX Canada, agrees that the supply shortage needs to be addressed, or affordability will continue to decline—not just in Ontario but nation-wide. “We have a critical housing supply issue that’s crept its way into almost every community across the country,” he said. “With the amount of developable land in Ontario dwindling, it’s high time the province explores options, such as increasing building height and density in certain neighbourhoods, making it easier for property owners to add secondary suites, converting vacant commercial units for residential use, and waiving infill development charges.”

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