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Louis Vachon, the CEO of National Bank of Canada said that the country should consider ending blind bidding to cool the nation's housing market. Blind bidding occurs when new listings are posted with 'an offer date', forcing potential buyers to virtually throw blind offers, without knowing what others have offered. In many cases these offer's are hundreds of thousands of dollars over the asking price, and in some cases they could be $100,000 over the next best offer. 

Letters to the editor: April 2: 'End blind bidding.' Readers debate real  estate practices and soaring Canadian home prices, plus other letters to  the editor - The Globe and Mail

Mr Vachon says the regulators should look at regulating or forbidding blind bidding to increase price transparency and make it harder for buyers to waive certain rights in their purchase offers.  To make offers appealing to sellers, buyers are not only going in with a very high price, but they are also giving up rights to home inspections and removing clauses that protect them if they are unable to arrange financing for the purchase.

Mr Vachon went on to say that new policies could better protect buyers and may slow the velocity of the current real estate market. He also said that changes to mortgage underwriting criteria may be needed over the next 6-12 months as well.


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Coming up with a reasonable offer today is difficult, especially when many home sales turn into auctions. Many homes in our high-demand market are being sold with an offer date forcing buyers to submitt their offer at the same time as all the other prospective buyers submit thiers. Basically bidding  without know what others have bid, also know as a blind auctions.

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In many cases, residences could sell for $100,000's over asking price, and in extreme cases up to $1,000,000 over asking.

Many are saying that the reason homes are selling for so much is because of a increase in housing demand, low supply of new listings and favourable mortgage rates. This would be true if you believe that home sellers really don't have any idea what their property is worth in high-demand market conditions.

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The 'list price' used to an important factor that suggested the seller's expected price to  prospective buyers. Now it appears that homes are being deliberately listed at lower prices than the recent comparable sales to attract a larger cohort of buyers. Basically trying to create a frenzy of buyers, encouraging multiple bids that are not only higher than list price, but in many cases subject free.

Watch out for homes that are listed below market, based on the comparables - especially if the listing comes with an offer date. In these cases, the listing price does not represent market value, it is just an invitation to offer, when the seller really has no intentions of accepting anything lower.

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