This is the commentary from RECO:
“Under TRESA, if the seller client directs, the registrant is permitted to share the content of competing written offers with every person who is making one of the offers. The seller may also direct that only parts of the offers be shared. Any offer information that is shared must not include any personal or identifying information.
Registrants must follow the instructions of their seller client, including any change in the instructions.
For example, a seller client may instruct their registrant to share the content of offers and a few days later, change their mind and instruct their registrant not to share the information.
A registrant representing a buyer client should advise their client that a seller may or may not decide to share the content of offers submitted before their client makes an offer.
A registrant should also advise their buyer client that the seller is at liberty to change their mind about sharing offer information.”
This is the new provision in the TRESA legislation:
22.7. (1) If a brokerage that has a seller as a client receives a competing written offer, the brokerage shall,
(a) communicate the number of competing written offers to every person who is making one of the offers; and
(b) if the seller directs, share the substance of the competing written offers with every person who is making one of the offers.
(2) For the purposes of clause (1) (b), a seller may direct that only parts of the competing written offers be shared.
(3) Information shared under clause (1) (b) must not include any personal information of the person making the offer or any other information that would identify the person making the offer.”
It would be helpful if there was a protocol, but there is none. It looks like the Seller gets to decide about the substance of Offers. The total number is already a requirement of the Brokerage.
The next step is interesting. The Brokerage is sharing, not the Seller. We need to have a Direction or Consent from the Seller.
Just exactly what does that mean? Actually, it means:
- Some, not all
- No personal identifying information
- Seller gets to select what parts are to be shared
The Seller receives several Offers, all around the million dollar mark. But one Offer, from a neighbour comes in at $1,075,000.00, with a closing date two years from now and a Vendor Take Back mortgage for 95% of the purchase price at a low interest rate.
By simply disclosing the price, the Seller might be able to generate some higher Offers from the competitors.
Yes, it’s sneaky and yes, it’s tricky, but this “opportunity” is now available.
Apparently, the consent of the participating Buyers was not a requirement. It would have been very easy to include that but they didn’t.
Change of Rules
According to the RECO interpretation a Seller may change their mind, then change their mind again about this Offer substance disclosure. It should be noted that there is nothing in the legislation one way or the other about this.
Brian Madigan LL.B., Broker