Open Bidding vs Blind Bidding: Does Ontario's New Law Change Anything?

Over the past decade in Toronto, a lot of homes sold in a bidding war. Several buyers put in their prices, and the highest offer wins. In that multiple-offer process, nobody knows what anyone else has offered, and the buyer with the best price and no conditions gets the home. We call that blind bidding. There is a newer law that tries to change this, and I want to explain what it actually does and whether it moves the needle.

I am Moe Asgarian, Principal Real Estate Broker in Toronto and ranked #47 worldwide at RE/MAX. Let me break down open bidding, what it means for buyers and sellers, and why it may matter less than people expect.

Blind bidding vs open bidding

Here is the situation the market runs on. In a blind bid, no one knows the other offers. That means a winning offer might beat the next one by just $100, or the winner might have paid far more than they needed to. A lot of people believe that if offers were made public, it would slow the climb in home prices. Everyone would look at the numbers, and the winner would land on a reasonable figure. That is the theory behind open bidding. The question is whether it actually plays out that way.

What the new law actually allows

This law took effect on December 1, 2023, in Ontario, and the goal was to calm the market down a little. Under it, a seller can choose to disclose some or all of the details of an offer. For example, the seller can let others see just the price, or the conditions, or the closing date. The key word is choose. The seller still has the full option to run the sale as a blind bid. Nothing forces open bidding on anyone.

Why open bidding does not always help buyers

You might assume that opening things up is good for the buyer and keeps prices down. The reality is that it does not always work that way. When offers are close together, each buyer keeps nudging their offer up, the cycle repeats, and the home finally sells for more than the opening bid. It can also be a poor deal for sellers. When offers are hidden, a buyer who really wants the home might put in a very high number, and the seller profits more. Once the offers are visible, that number may not climb as high. So depending on who is at the table, open bidding can cut against either side.

Why sellers are not rushing to use it

So how much have sellers embraced it? In practice, this has rarely happened. Go search the housing platforms across Toronto and you might find a single home in the whole city that sold through open bidding. Remember that price is set by supply and demand. If a seller has $1.2 million in mind, they wait until they get that offer, unless they realize their number is too high and the demand is not there. And in the end, it is the seller who decides which offer to accept. Open or blind, the seller is never obligated to take any offer. That is why this auction method is not a major factor on prices.

What really sets the price

There are more important factors that decide the market. One of the most basic ideas in economics is supply and demand, and it is no different here. The honest truth is that open bidding or blind bidding does not set the price. The market sets the price. I would not say the format has zero effect, but it is not that influential. What matters more is where the home is, the quality of it, and above all, in today's market, the interest rates that push people to buy or to hold off. Clients have asked me about this a few times over the past months, so I wanted to lay it out clearly. If you are weighing a sale or a purchase and want a straight read on how to price and position it, fill out the form at the bottom of this page or book a free consultation with my team. Stay well and take care.