Today’s Toronto Star article on “Bidding War Complaints go through the Roof” highlights Toronto’s continuing HOT housing market, the high stake bidding wars that are occurring and how desperate people have become to win the house of their dreams.
Bruce Matthews, Deputy Registrar in charge of complaints for the Real Estate Council of Ontario (RECO – the regulatory body for Ontario’s 58,000 realtors) commented that it is quite worrisome that people are taking risks such as waiving home inspection and financing conditions against the advice of their realtor when they found out they were in a multiple bid situation. Matthews also commented that “unfortunately in bidding wars, reason and rational thought are often replaced by emotion and haste.” Taking this kind of risk means also having to accept the consequences.
Home buyers have walked away from large deposits because they could not get financing because the appraised value of the home is lower than the price offered for the home or they didn’t quality for financing. Having a pre-approval for a mortgage does not guarantee that you will actually get the all the monies you require. There could be structural damage in the home which may have been found with a home inspection leaving people with costly repairs after the sales closes.
RECO is launching public transit and YouTube campaigns to encourage house hunters to educate themselves about buying a home before making the biggest purchase of their lives.
Visit the RECO website for information brochures for buyers and sellers. This link will provides further information on Competing Offers.