The president of the Sarnia-Lambton Real Estate Board is speaking out against a mandatory auction process for home sales.
The Ontario government has suggested the measure, as a way to reverse rising home prices.
Rob Longo said it could have the opposite effect, by creating "auction fever" and leading to higher bids.
He said it also creates a privacy issue for home buyers.
"If you're looking to buy a house, and you want to submit an offer or bid to the sellers, that's a contract between yourself and the sellers or an agreement between those two parties," said Longo. "If we start to open it up to where now everyone is going to have to be disclosed and basically if any other bidders or any other people are offering on that property, we're going to have to disclose all the terms of your agreement to them. That could create some privacy concerns and disadvantages for those buyers."
Sarnia-Lambton Real Estate Board President Rob Longo. (Photo from RobLongo.ca)
Longo said buyers would also have a harder time negotiating their terms.
"With an auction process or a more open process like that, it really becomes a one-sided transaction," he said. "The seller is dictating all of the terms of the agreement, the only thing the buyer is going to submit is the price. It really becomes disadvantageous for the buyers at that point."
He said the two parties should be able to continue to choose either the traditional offer process or auction.
The Ontario Real Estate Association has said bidding wars are symbolic of the bigger issue of not having enough supply to meet demand. This leads to multiple offer situations and higher home prices.