An upcoming change by real estate boards in Metro Vancouver and the Fraser Valley promises to bring slightly more transparency to bidding wars over properties in the region.
Denny and Monica go over these changes and share how they will affect real estate transactions in multiple offer situations.
This episode will focus on the “Disclosure of Multiple Offers Presented Form” and what it means, the amount of new forms realtors keep seeing, how it prevents dishonesty and helps transparency, consumer trust, and alternate options.
Read the Transcript Here
Hi everyone, I’m James Garbutt. And I’m Denny Dumas. And this is the Garbutt Dumas Real Estate Podcast.
Denny: Monica. That’s where you say “Denny”.
Monica: Oh! Denny…
Denny: The Real Estate Board… I don’t even know who puts these forms together.
Monica: The forms committee!
Denny: The forms committee has done it again. We, it seems like every single year in Greater Vancouver there are…let me rephrase. At the beginning of my career nine and a half years ago, it seemed like every two to three years there would be a new form. In the last three years seems like there is a new form every three to six months. And it just seems like it keeps getting greater and greater.
When we are in our 50s which is like what 42 years away?
Denny: To buy and sell real estate will probably be hilariously complicated. Right now, when you are listing a property for sale, there are eight or nine different documents that you’re going through with a seller when you’re writing an offer, there’s probably more than that. And they’ve added another one so we just want to explain to people what it is, why, why it was brought in. And our thoughts on whether or not it’s going to be useful or not.
So the form is called “disclosure but multiple offers presented”.
Monica: So this form is another form for the listing agent to fill out and it has to be filled in for every offer that you receive. So you have to put in the real estate brokerage that the buyers are with and the date of the offer. It’s a pretty simple form to fill out to be honest. It’s just, I don’t see the value in it really because you don’t have to provide this form until after the dust has settled on the offers.
You do have to provide it within 24 hours, but you’re not providing it to the interested parties during the multiple offer. Yeah, during the timeframe of the multiple offers being presented. You are giving it to the seller, but the seller is receiving the offers and can see on the offers who is writing it and from what brokerage they are and I don’t know if that form creates any bias with the seller in terms of what brokerage they may want to trust in, which one they may not want to trust. I really don’t know.
But yeah, we at any rate we provide the offers. Then we provide the form that we’ve talked about in the past where we disclose the remuneration that each offer will entail and then now we’re also disclosing the brokerages that are offering and a separate forum.
All of this information by the way can be found on the offer itself.
Denny: Correct. I heard something a while ago that helped me understand new rules, new paperwork, new laws.
And they said: remember that laws are brought in for the .0001% of the population. You know like most people are not going around hitting people with swords and you know killing people but there is a law that says you can’t murder someone. Same thing when writing real estate like when we see a form like this, I immediately think well, I’ve never lied to another Realtor and said hey we have 22 offers when really we have one. This just seems like a pointless piece of paperwork that is adding time to our day. And you know instead of 92 pieces of paperwork now we’re doing 93 and it’s getting out of control.
But you have to, we have to understand that there are bad people in any industry. There are bad contractors, there are bad people in banking that don’t always have the consumers best interest in mind and they are bad people in real estate and we’ve dealt with some of them. And so there are definitely times where your intuition is going off a little bit and thinking like oh, it wasn’t that busy this weekend? They say they have seven offers in hand already, that doesn’t really seem logical. So as a buyer’s agent, you’re asking a lot of qualifying questions to a listing agent to really dig into, do they have seven offers or not?
And this form is just maybe one extra step of protection or one extra step that will make a, you know a bad person in an industry think about whether or not they want to be unethical. And again, I think it’s like a super small percentage. Most people you work with are like really good to work with and really honest and you know, they’ll say things like we didn’t really have a busy week and I thought we were gonna get like six or seven offers but we’ve got two. Or you know, and and those are pretty easily believable statements when you are in conversations with listing agents but at the end of the day, to me, this form only provides the brokerages, sorry, the brokerage name so it’s not going to say Monica Harmse wrote an email or wrote an offer it’s gonna say Oakwyn Realty wrote an offer.
Is there any way that a buyer’s agent, if they believe the listing agent to be unethical, is there any extra step that this form is in now that they can go back and like call people and be like hey, did you actually write an offer it felt like the listing agent was lying to me? No, because it’s unpractical to call Oakwyn and be like hey, one of your 1500 Realtors wrote an offer. Do you know who it is?
Monica: Right. So, I’m all for anything that adds an extra layer of trust in the real estate industry. I have absolutely no problem filling out this form. It’s easy. Sure, I’ll fill it out doesn’t bother me one bit. I don’t love all the paperwork but I’ll do it to add another layer of consumer trust, totally fine.
But this does not solve the problem at all. Something that was already in place that does solve the problem is Realtors have to keep the offers that they’re given for their listings for a certain amount of time. And then if a buyer’s agent feels that a listing agent has been untruthful about the amount of offers that they’ve received, they can call the listing agents brokerage anytime they want for the next few years and ask the brokerage to contact that Realtor and provide the offers that they say that they received.
This is something that has been an active component of our industry for a very long time. I’ve been called and asked for offers to be provided before and I’ve provided them because of buyer’s agent, well, I think it was probably the buyers were feeling that they got gypped in some way. So I had to provide the offers, which I had. And they went back to the buyer’s agent said, well, she’s said she had these offers and here they are. Do you have any other questions? And they’re like, nope, and that’s it. And that was the buyer’s agent doing her due diligence to make sure that her buyers were treated fairly in that situation and they were.
So this is a process that was already a component of our industry. I don’t think that having a list of the names, adds any extra layer of of anything, anything more than the listing agent themselves having to keep these offers which we were already doing.
Denny: Is it step one have multiple layers of more disclosure?
Monica: I’m guessing Yes. It has to be, it has to be because just like you said just listing the brokerage that doesn’t offer any extra layer of truthfulness or transparency. It’s just like listing some brokerages and the date unless the buyer’s agent is going to call the listing agent and ask for the offers. Like that’s really the only way to ensure.
I mean the other thing that’s nice about the form I’ll say that does add a layer of trust is we provide this to the seller and the seller has to sign it. So if we say that there’s five offers and the brokerage is listed on there with the date we have to provide that to our seller and our seller has to sign it. So I guess having a third party sign it may give the feeling of more truthfulness.
Denny: We will see.
Monica: Yeah, we’ll see.
Denny: I know there are some countries around the world that have like or is it Toronto? I think Toronto might have a multiple offer registry.
Monica: They do. Yeah. In Ontario.
Denny: Yeah, I don’t know exactly what information is provided in there. But something like that online rather than, like another piece of physical paper seems silly. But…
Monica: Yeah, again, I’m all for anything that adds consumer trust because like you said at the beginning of this podcast, we work with some really really amazing Realtors that are honest, that do such a great job, that like we love working, there’s so many really really good Realtors out there. Most, most there’s like, really awesome Realtors out there. And there’s just a few that the .25% and that’s who these forms are for.
Denny: I look forward to the next new Forum Podcast likely scheduled in three to six months.
Monica: Yep. You know what’s funny is the like, they don’t just have new forms every few months they also change the forms. So the forms that we already have they make subtle little changes and I have been bamboozled by these changes recently because my brain is so used to doing things one way and they’ve just made, there’s one form where they made a really subtle change. They just switched the buyers and the sellers initials to different sides of the page. So I was just used to like throwing them in on one side over and over again and then they just like swept them.
Denny: What form was that?
Monica: The PDS.
Denny: Oh yeah.
Monica: Yeah, the property disclosure statement, the sellers initial switch sides and I was like great, thanks. Thanks everyone. So I’m just so used to throwing them in on this side and on the contract the purchase and sale, the sellers signatures are still on the same side. So you know how you go through and you just put everybody’s initials like on the same side, boom, boom, boom, well, then you get to the PDS and it’s like, it’s all the other sides are gonna go back to the other side.