Acceptance of Pre-emptive Offers (Ontario)

Question:

“Seller Has The Right To Accept Any Pre-emptive Offer Without Any Notification”

Would this be a violation of RECO’s interpretation of the Act and the Code disguised as seller’s ‘Legal Direction’?

Answer:

There is no right to break the rules. The rules require notification ONLY to those with registered Offers. If you don’t have one, then you are not entitled to notice.

The Seller is not subject to RECO regulation or discipline. The Listing agent is, and would be obligated to change the Offer time on MLS if there were a change etc. I assume that the appropriate Seller’s Direction has been signed.

If so, the Listing agent only needs to communicate with any Buyers’ agents who registered “competing offers”. These are the only Buyers protected by the system.

Showings, bookings, inquiries etc. don’t count. That’s a separate issue. It may very well be that following that type of practice would generate more interest, more offers, and a higher price, but that’s something which can be avoided with the Seller’s informed consent.

You will find those references relating to best practices and acting in the best interests of the client Seller. So, RECO encourages and promotes multiple and competing Buyers. But, it’s just a strategy or tactic. Sometimes it works, sometimes it doesn’t. That’s why RECO would say call everybody.

However, if you want to accept the bully Offer, the question is specifically whom MUST you call: “Just those with competing Offers”. That means it is written, signed and in the possession of the Buyer’s agent, simply awaiting presentation.

The issue for regulation is considered somewhat differently depending upon perspective of either the Buyer’s Agent or the Seller. The minimum compliance is “registered offers”. That’s with the Seller’s informed consent.

Assuming that the Seller has not excluded anyone, and a bully offer arrives that he would like to take a look at; then, “yes” you should be telling everyone who even remotely might bring you an Offer to compete with the bully Offer.

In the first instance, a Buyer’s Agent has no recourse to RECO. In the second case, the Seller has recourse to RECO by reason of the Listing agent not acting in his best interests.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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