TRESA now permits a Seller’s representative to share content, some content, or a little bit of content with all other bidders whether the Buyer consents or not, just not identifying information about the Buyer.
The Seller gets to choose and provides instructions.
To some degree, this is intended to provide some transparency for the buyers. No longer will someone blindly outbid someone else by $100,000.00 on a million dollar deal.
Well, if that happened, the Seller would simply not tell anybody anything! Why would they bother? They have one very high bidder, so they would just go with that. Proceeding in that fashion is the “old system”.
What if the bids were all close, just $5,000.00 to $10,000.00 apart? Now, suddenly the Seller might decide to jump in and disclose all of the bids to everyone. Slight risk here, the high bidder might decide to lower their bid by $5,000.00 because they are already $10,000.00 over everyone else. So, that could be a problem!
The disclosures need to be made across the board to everyone so that every person who has submitted an Offer is in the loop. Well the TRESA legislation didn’t quite say that, it said:
“….every person who is making one of the offers…”
Certainly, that includes everyone who has already made an Offer, but what about someone “in the process”. The word “is” happens to be present tense. So, that’s a little more than past tense, but the legislation did not go on to specify “thinking about putting in an Offer”, which would be future tense. It clearly said ‘is”. While the TRESA legislation may be clear, the actual interpretation is not clear.
Does this include someone who has “registered” an Offer, but has yet to “deliver” it?
To be cautious, the disclosures should be restricted to the past tense.
What would you disclose?
Full Offer
Some Sellers will disclose the full Offer, start to finish with just the names blacked out.
If you were on the buy side, you would want to look through the Offers for any unusual provisions and bring them to the attention of the Listing agent.
How great is that? The Listing agent gets input from all the other participants! How good does it really get? Not much better than that!
Selected Terms
So, here the Listing agent might select 1) Price, 2) Deposit, and 3) Closing Date. That’s fine but the high bidder included several conditions including: 1) Financing. 2) Appraisal and 3) Inspection. Also, there was one further condition which was the sale of the Buyer’s own property. And, one more important term, the Buyer had the right to set back the closing date by 6 months.
You can appreciate that the Listing agent in exercising their discretion about what to disclose could create an unfair playing field.
Honesty, Fairness, Good Faith
These obligations are now imposed upon the parties to a contract. But, they actually have to have a contract. This applies to the contract, not the negotiations prior to the contract.
Brian Madigan LL.B., Broker
Comments 2
How about submitting a written preliminary (less-than-best) offer to simply to qualify for the disclosure about other bids and then decide whether to proceed with an improvement or to withdraw.
Author
That would be a great idea. Buyers would love that.