[Reporter] This townhome is getting ready for sale
and so far, it's a familiar scene.
Stagers prep the place.
Home inspectors look for trouble.
The photographer waits for just the right light.
But there's one major difference about the sale of this home.
[Daniel Steinfeld] This property is going to be going up for an open auction
which is for all intents and purposes the same as what people are used to
with the one big difference being that all the bids are transparent.
So this has been a transformation already.
[Reporter] Real estate agent Daniel Steinfeld is an industry veteran
but a few years ago he started questioning the status quo.
[Steinfeld] The rule in organized real estate in Ontario
is that the real estate profession can't let anybody else know
what other people are bidding.
[Steinfeld] Good morning --
[Reporter] So he decided to get around the system by becoming an auctioneer.
I am co-founder and broker from On The Block Realty
and On The Block Auctions.
This is where the auction itself will take place.
You're able to see what the current price is
then when any other bids or offers come in
you know how high you need to go.
[Reporter] Steinfeld's not the only one who's been thinking about this issue.
It's not fair that issues like blind bidding
are so heartbreaking for so many families.
[Reporter] This past election, the Liberals made a ban on blind bidding
part of their housing platform
promising more affordability and more transparency.
But what would an end to blind bidding look like?
We're going to dig a little deeper, starting with the issue of affordability.
How difficult is it to really get into what matters and
how this all works when it's such an emotional thing?
[Murtaza Haider] It is an emotional thing, buying and --
[Reporter] Murtaza Haider is a researcher of Data Science and Real Estate.
He says our housing market is in crisis.
On a per capita basis, we are building half as many homes now
as we were building in the early 70s.
[Reporter] But a ban on blind bidding could help.
When a house sells via blind bidding, a hopeful buyer could unknowingly bid
tens of thousands more than the second highest bidder
and push up the price for the entire surrounding neighborhood
and by removing it, you could just take that extra little heat
out of every little market across --
Absolutely, so you will remove a higher volatility
you will add more stability in the market.
[Jeanhie Park] My daughter put this video together.
[Reporter] Jeanhie Park's on board with the idea of more transparency.
[Park] So this is a video of the exterior of the cottage.
[Reporter] You guys out on the lake?
[Park] Those are my kids, those are my girls.
[Reporter] This spring, Jeanhie and her family went hunting for a cottage
just like throngs of others looking to escape the city.
There were a lot of properties we were interested in
unfortunately we got outbid.
[Reporter] They'd already lost four blind bidding wars
so weren't surprised when their agent told them they'll be
competing on this cottage, too.
So how much over listing were you advised to bid that night?
A couple hundred thousand.
Over list.
We just went a little bit over, just because we wanted
to get that property.
[Reporter] Turned out, there were no other bids,
We felt duped and manipulated.
The fact that there were zero registered offers
that we were misled with false information in order for us
to put in our top price.
You paid $230,000 more than you felt you should have
I think is just--
Mind-boggling, I know, I know.
We're having to pay for this while she gets a big fat paycheck.
[Reporter] Jeanhie filed a complaint with Ontario's real estate regulator.
I do have footage where she does admit to another registered offer.
[Reporter] She even submitted a recording she believes proves her case.
Two offers, she says.
You believe the offer was [$333K]?
[Reporter] We reached out to the realtor as well
but she won't comment while the investigation is open.
So even if this investigation finds in your favour, what happens?
Well they're not going to reduce the price that we paid for
and they're certainly not going to pay for my mortgage
and I think there's little that's going to be done against this agent.
Do you think
blind bidding should be banned outright?
Absolutely.
100 per cent.
[Reporter] And she's not alone.
A poll by CBC found the majority of Canadians want a ban on blind bidding
less than a quarter support the status quo.
David, thank you for doing this really--
the real estate industry is pushing back.
The seller who is the homeowner should have that right
to decide how they want to sell.
[Reporter] David Oikle leads the Ontario Real Estate Association.
To what extent is it in fact rigged
in the favour of the sellers against the buyer?
We're certainly in a seller's market but it needs to be something
that is important you know in all markets in all circumstances.
[Reporter] Besides, he says this proposal would barely address affordability.
Australia and New Zealand have auctions
prices have gone up there because, you know, auction fever.
I don't think this is -- addresses a problem and creates additional ones.
We've got a beautiful day for an auction here, let's get the show on the road.
[Reporter] In Australia, bidding wars are fully transparent.
Right out on the street transparent
where houses are sold in open auctions.
[Auctioneer] You better be the one holding that very last bid.
[Reporter] But just like here in Canada
Australian home prices are way up this year.
I think that that's going off of a very narrow-sided view
of what auctions are and how they operate.
[Auctioneer] At 920, 40 I have now, 60 can I make it, sir --
That high emotion, looking at people bidding against you
and maybe doing things that are outside of your means
is not the model that we have.
It's an online model, it allows people to do their research
for days or weeks ahead of time.
[Reporter] And when auction night comes, it's all in front of them
at the click of a button.
So the auction has just now opened, all the bidders have pre-registered.
Now they've logged in and we're all just waiting for the first bid to come in
and we now have one bid $1,000 over asking
and now everybody else has to just wait and see how they'll react
what happens to the price going from here.
And unlike Australia, none of the bidders
can actually see who the others are.
Why can't you just say, yeah, sure you want to sell your house that way
and these people want to buy it that way, we're going to help facilitate it
and we'll take our cut and everybody can be happy.
The consumer gets to decide if they want to sell it
with or without representation.
[Reporter] Bottom line, if you want transparent bidding
you'll have to choose to do it without a traditional realtor.
But when you break it down, the choice may not be so clear.
In Ontario alone, there are more than 80,000 real estate agents
who only sell via blind bidding
but only a couple of auction houses focused on real estate.
For Haider, the answer is simple.
I think the best thing is to go back to the municipal, provincial regulators
and say is your current practice guaranteeing fairness
protecting the rights of sellers and buyers alike
but if it's not then let's build transparency and trust
because that's what the industry relies on.
[Reporter] And as always, it relies on bringing buyers and sellers together
whether in a heated bidding war or not.
Okay, so the clock's run out, but we only had that one bid come in
so now everything defaults to a more traditional sale
between the buyer and the homeowner.
So even with a more transparent process, the house sold
buyer and seller are happy
and at the end of the day, Daniel still got to hang one of these.
Peter Armstrong, CBC News, Toronto.