The Internet has changed the way that many Canadians buy and sell real estate. But would an eBay style auction for homes ever be adopted by Ontario residents? One Vaughan real estate brokerage is hoping their online auction platform will increase transparency and fetch the highest price for properties.
The platform gives clients the option to list real estate on the brokerage's website with a countdown. Once the auction goes live, potential buyers can view the house and details of a home inspection before placing a bid. Sellers will be able to set "reserve" prices to ensure they receive a minimum amount for the property.
The goal of the platform is to make it easier for buyers to see what others are offering, allowing them to compete with all the information. It also gives sellers a reasonable window to see how much their real estate is truly worth in the marketplace. The Ontario Real Estate Association says that a public platform may make some residents uncomfortable, but it is a legal option for people selling and buying a home.
Between Sept. 2014 and Sept. 2015, 20% of Australian home sales were completed by auction. Similar systems are also popular in the United States. While time will tell whether it will catch on in Ontario, the method does raise a number of legal questions and risks that do not exist in traditional real estate purchases. It is in the best interest of both buyers and sellers to speak to a lawyer before and after participating in such an auction.