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Real Estate

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“Phantom bids” are driving up Toronto home prices—by as much as $90,000

Here’s a terrifying tale: realtor Josie Stern’s clients paid $90,000 over asking for a midtown house priced just shy of $1 million, even though they were the only ones making an offer. Stern and the buyers are miffed because they believed there were two other interested bidders—and chillingly, the Real Estate Council of Ontario says they’ve received a surge of similar complaints about “phantom bids.” Stern eventually got the listing agent and the sellers to accept a mere $45,000 over asking. Now she’s demanding new legislation that will prevent phantom bids by making listing agents provide a roster of all the involved brokers before any bidding begins. It’s already against RECO’s rules to pretend to have bids when you don’t, but only four agents have been disciplined for the practice over the last decade. RECO’s now reviewing whether they should urge legislative changes around the process (the thousands of frustrated buyers would probably say yes). [Moneyville]