Form 801: Taking action against ‘phantom offers’
Taking Action against Phantom Offers: A Realtor’s Perspective
A Phantom Offer is when a realtor suggests that another offer on a home exists when no offer has been received. It is now a provincial offence to make such a statement, and a realtor could loose their real estate licence if found guilty.
As of July 1st, The Real Estate Council of Ontario is enforcing rules that will place a stricter criteria on the definition of a bid on a real estate property. The phantom bid is an elusive scam, which home buyers often suspect occur in bidding wars, but are unable to prove. The scam involves an agent hinting to prospective buyers that there are other bids as a way to coax them to bid higher. An agent might say, “We’re expecting another offer. I do have another offer. You may want to go back to your client and make sure this is their best offer”. The agent is suggesting there might be competing offers when there may or may not be.
With the new rules, an agent cannot suggest or even imply that they have an offer unless they have one in writing, signed and sealed. Although the current rule is clear that no offer is valid until it is signed; the new rules will force brokerages to keep an offer, or a summary, a list of buyers and contact info with the broker’s name, date and time, on record for one year. However, no dollar amounts will actually be included in the summary, and suspicious buyers will only be able to find out if there were actually other offers after the bidding has passed. This would be done through a complaint to The Real Estate Council of Ontario.
A Realtor found guilty of creating a phantom offer would be committing a provincial offense, and could be charged. Overall these changes are designed to protect purchasers and will allow the winner of a real estate auction to see if they had been taken advantage of by untrustworthy sales reps. This recent move to protect consumers is seen overall as a positive by sales agents and consumer alike.
Author: Brandon Jones
Article retrieved from Oakville News
For FAQ and answers regarding Form 801 please click here: https://www.oreablog.com/2015/06/faq-around-standard-form-801/
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