Multiple Offers -The Bidding Wars! Protect yourself!


Use bidding war clause if you are suspicious is one way to protect yourself.If you are concerned this will affect the offer in a negative way try this.

At the time the offers are being presented get the agents to sign a Log form attesting to the fact they are presenting an offer with date and time , property info…. If agents are not present have the form sent to them to sign and send back.Click here to see the form.

We all read the following article recently regarding a “bidding war clause” written by a prominent Toronto Real Estate Lawyer Mark Weisleder. Here it is if you have not read it. 

I read with interest the story about the couple who bid $90,000 over the asking price on a million dollar home in Toronto, apparently thinking that they were in a bidding war, only to find out later that they were the only bidders.  This case raises several interesting questions.

How did this happen?

Under REBBA 2002, in a bidding war, the salesperson must disclose to all parties how many offers have been received. They are not permitted to disclose the name of the buyer or the price contained in any offer.

In Toronto, a practice has developed whereby buyer agents register an offer, meaning they call the listing agent and tell them that they plan on presenting the buyer offer later that day, or early evening. However, this does not obligate the buyer agent to show up. If their buyer changes their mind at any time before the offer is presented to the seller, then they can still decide not to bid. A listing agent may receive 3 or 4 of these registered offers during the day, with no guarantee that any will be actually presented. But the listing agent will typically tell all of the 3 or 4 potential buyers that they are expecting 3-4 offers that evening. This does not mean that 3 or 4 offers will actually show up. Thus it could happen that one buyer shows up, bids over asking and then the others change their minds and do not come. This is likely what occurred in the above situation.

Buyers must understand this possibility and properly prepare for it.

Could this situation have been avoided?

One way to avoid not having this happen to you is to use the bidding war clause that I developed almost 2 years ago that is widely used by real estate salespeople today. Here is the clause:

“This offer is being submitted on the basis that it is part of multiple offers. If the seller receives no other offer by 10 pm, the seller will notify the buyer or the buyer salesperson and the buyer will have 1 hour to revoke or revise their offer. If the seller accepts the buyer offer, the seller will provide, within 24 hours, the name, address and phone number of the salesperson and brokerage company that submitted the competing offer.”

By using this bidding war clause, the buyer has the ability to cancel their offer if no other offer is received and has the assurance that if their offer is accepted, the seller will have to prove that they indeed did have at least one other offer available.

In my opinion, if this kind of clause was used in the case where the buyers offered $90,000 over the asking price, then they would have been able to cancel their offer once they found out that no other offers were received.

Could the buyer have complained about the behaviour of the seller’s real estate agent in these circumstances?

In my opinion, if the seller’s agent knew at the time that the offer was being presented that the other offers were not coming in and that the buyers mistakenly believed that they were in a bidding war, then their behaviour would be judged to be unethical. A seller agent cannot mislead a buyer or buyer agent, just to get their seller the highest possible price. They must treat every buyer and buyer agent fairly.

Could the buyer have cancelled the deal on their own?

This is a difficult area of the law. If the buyer could prove that the seller or the seller agent misled them into thinking they were in a bidding war, or if it could be proven that the seller knew that the buyer was mistaken when they presented the offer, then it is possible that the buyer could claim that this was a legal mistake and thus try to get out of the contract on that basis. However, this will involve expensive legal fees to try and sort it all out.

In the case noted above, the parties settled the matter by the buyer agreeing to pay $45,000 over asking. This was probably better than paying lawyers to try and figure it all out. Still, by using a bidding war clause whenever you are suspicious about the possibility of a bidding war, you can successfully avoid this happening to you.

Mark Weisleder is a lawyer, author and speaker to the real estate industry. If you have any questions about real estate issues, email mark at, visit his website at and sign up to receive his newsletter updates.