Question #1: What is TRESA?
Answer: TRESA stands for Trust in Real Estate Services Act and is replacing The Real Estate and Business Brokers Act, 2002 (REBBA).
Question #2: Will this affect my mortgage affordability?
Answer: No. The new TRESA Act does not affect the mortgage qualification process or overall affordability of you as the consumer.
Question #3: Can I represent myself and submit my own offer?
Answer: Yes. This is called a Self Represented Party, or SRP for short.
Question #4: What are the downfalls of being a “Self Represented Party” (SRP)?
Answer: Being a Self-Represented Party (SRP) in real estate may lead to limited access to information, challenges in negotiations, legal complexities, difficulty in setting the right price, limited property exposure, emotional decision-making, potential legal pitfalls, and a time-consuming process.
Question #5: What is open bidding?
Answer: Open bidding is a clear way to make an offer on a home, where multiple buyers compete for the same property. In TRESA (the Real Estate and Business Brokers Act), sellers can choose to negotiate the sale of their property in a unique way. If the seller instructs the brokerage, they can share the details of competing offers with all potential buyers. This includes information like the offered price, financing details, and terms of the offers. However, personal details of the buyers making the offers are kept confidential. It’s important to know that the brokerage must still reveal the number of offers received by all competing buyers. This process promotes transparency and fairness in the home-buying process.
Question #6: When does a seller have to choose which type of offer process they want to conduct?
Answer: When a home is put up for sale, the seller typically decides from the start whether they want to use an open offer process. This means that all potential buyers can see and compete with each other’s offers. However, the seller also has the flexibility to change the rules of this process anytime before accepting an offer, even after reviewing the terms of all the offers. The key here is clear communication — any changes or information must be shared with all involved parties simultaneously. Importantly, these changes should not reveal the identity of any specific buyers. This flexibility allows sellers to adapt to the situation while ensuring fairness and transparency in the home selling process.
Question #7: What types of information can a seller decide to disclose about an offer?
Answer: In an open offer situation, various details of your offer can be shared with all other potential buyers. This includes information like the price you’re willing to pay, the proposed closing date, any items you want included in the sale, and any conditions you’ve set. It’s like everyone putting their cards on the table, so to speak. However, it’s important to note that certain personal details, like your name and address, cannot be disclosed to all the other buyers. This ensures your privacy is protected in a multiple-offer scenario. The idea is to share enough information for transparency but maintain confidentiality when it comes to your personal identity.
Question #8: What are the strategies for revealing offers if I am a seller?
Answer: Imagine you have two offers that are very close in value but differ in other aspects. For instance, Offer 1 has the highest price, but the closing date and some conditions aren’t ideal for you. On the other hand, Offer 2 aligns perfectly with your preferences but falls a bit short on the price.
In this situation, you might choose to disclose only the highest price from Offer A. The goal is to encourage Offer B (which is already good in terms of your preferences) to reconsider and possibly improve their offer to make it more attractive. By revealing the highest price, you’re subtly signalling to all buyers that there’s room for improvement, prompting them to adjust their offers in the hopes of securing the deal.
It’s a strategic move to get the best possible combination of price and terms that align with your priorities as a seller.
Question #9: Can I prevent a seller from revealing my offer if I am a buyer?
Answer: If you explicitly state certain conditions in your offer, you have the power to include language that gives you flexibility. For example, you can include wording that allows you to reconsider or even withdraw your offer if the seller decides to share the details of your offer with all the other competing buyers.
This ensures that you have control over how much information is disclosed about your offer. It’s a way to protect your interests and maintain your negotiating position, allowing you to adapt based on the situation and what other buyers may offer.
Question #10: Can a buyer choose to withdraw their offer if the terms of their offer are disclosed?
Answer: Currently, sellers have a lot of control in the real estate process, especially when it comes to multiple offers. However, TRESA (the Real Estate and Business Brokers Act) provides opportunities to protect you as a buyer. Our team has come up with various ways and specific wording that can be included in your offer. This is designed to give you more control and flexibility, especially in unexpected situations, such as the seller deciding to open offers at the last minute.
By incorporating this carefully crafted language, we aim to ensure that you, as the buyer, feel comfortable and have options in different scenarios. It’s a proactive approach to navigating various situations and making the home-buying process more manageable and favourable for you.
Question #11: Do I need a realtor in Ontario?
Answer: No, you’re not required to use a realtor when buying or selling property in Ontario. However, it’s crucial to understand that if you go the self-represented route, you won’t benefit from a realtor’s expertise. This means you won’t have access to valuable information and guidance that comes from their skills and knowledge. Important things like well-crafted conditions, historical sales data, or the correct legal forms may not be readily available to you. It’s a trade-off to consider when deciding whether to engage a realtor or go it alone in the real estate process.