How Bidding Wars Work

Bidding wars in the Canadian real estate market have become more common, especially in today’s seller’s market. Bidding wars are different from multiple offers in that in the former, potential buyers are encouraged to compete with one another to place the highest bid on a property. Bidding wars can occur either organically or through incitement by listing agents. While there are no laws prohibiting bidding wars, there are ethical concerns and guidelines to keep in mind. Real estate agents have an obligation to promote and protect the interests of their clients, and to disclose if they are representing multiple clients on one sale. Bid disclosure rules vary between provinces. To win a bidding war, buyers often need to offer more than other buyers and should avoid placing conditional offers. Critics of the current bidding process argue for more transparency, while proponents argue for the seller’s right to choose how they want to sell their property.