The Open Offer Process
How will more transparency change the offer process?
As housing costs have risen and inventory remains well below demand, multiple offer situations have increased dramatically. Buyers and sellers have demanded more transparency.
In response to that the government has introduced an Open Offer Process with new legislation under TRESA coming into effect on December 1, 2023.
So what does this mean going forward?
The Open Offer Process does not mean all multiple offers will be disclosed from here on out. Sellers will be the ones to decide what if anything they will disclose in the offer process.
Here are the key takeaways:
Sellers initiate the Open Offer Process
Sellers can initiate this at any time in the offer process
Sellers decide what to disclose (ex; price, terms, etc.)
Sellers do not have to disclose that information from all offers received
If offer details are being disclosed, all buyers must receive the information
Sellers must not disclose any personal identifying information about buyers
Sellers must still disclose the number of registered offers to all interested parties
How does this impact you as a Seller?
Sellers can now determine whether they would like to sell their home under the traditional blind bidding process in which buyers are only notified how many offers are registered, or they can choose to disclose select information about one or more offers to all buyers involved. There are advantages and risks to this process but it can open up a myriad of options for sellers and become a powerful negotiating tool to encourage buyers to submit their highest and best offer.
How does this impact you as a Buyer?
For Buyers, it provides some extra consideration when drafting an offer. Knowing that the price or terms of your offer may be disclosed to other buyers can affect your decision to make an offer in the first place. Given the seller determines the process and that they have complete control of when and if they disclose offer information you need to go into each offer fully informed.
As with Sellers, there are advantages and disadvantages of knowing the terms of competing offers. Knowing how your offer stacks up against competitors can help you negotiate, but you may not always have a complete picture. Sellers are not obliged to provide information on all the competing offers nor are they obliged to provide all the terms on a given offer.
So how can you come out on top?
This is where working with an experienced Realtor and negotiator is essential. You need someone in your corner who understands the strategies being deployed and can use the available information to help you make strong and secure decisions. We are laser-focused on helping our clients achieve their goals through powerful negotiations and providing valuable insights to help you every step of the way.