In this earlier article (from May 2022) of ours, you already read that Online Bidding Systems and the Online Bidding Procedure is actually false security. For example, with the NVM’s online bidding system with closing date+time, the selling broker can simply see the amount of bids that have come in. This allows a selling broker to leak the amount of bids to one or more other prospective buyers, putting other bidders at a significant disadvantage. You can also read in this earlier article that getting your right in unfair bidding practices is very difficult.
In that first article we also propose some concrete solutions to counter this. Not that this proposal has to be adopted exactly, but the problem that arises now is that the government wants to put the thumbscrews firmly on the brokers with a series of restrictive measures that are not going to work in practice.
The problem there is now among home seekers
The problem now is that viewers/candidate buyers do not realize (enough) that everything can and may still happen as long as no written sales agreement has been signed. So even if there are still bids after a deadline or even after the house has been sold verbally or by e-mail. At least, this assumes that buyer and seller are acting as private individuals.
The real estate agent is now very often unjustly in a bad light when a much higher bid comes in completely uninvited after a bidding deadline or after a verbal sale. In accordance with the applicable rules, the broker is obliged to inform his client about this bid, and if the difference is too attractive, sellers often still go for another bid or another buyer. Believe me, most real estate agents will not like such a ‘bomb bid’ at all, because it only results in anger and/or disappointment. But that’s just what the rules are.
The remaining problems
Should you be a victim of unfair bidding practices, then vindication is often futile.
On the other hand, the government is now threatening to go big with a flood of new unworkable rules for the bidding system.
What can be done to quell unfair bidding practices?
This is very simple:
- Make the use of an online bidding system a legal requirement for every broker. This includes brokers who are not members of a trade association.
- Anchor the honor code/code of conduct ground rule (see here, here and here), that leaking bids is not allowed, into law so that it applies to every broker. That way, unbound brokers can be held civilly liable.
- Viewers and prospective buyers should be much better informed that a real estate agent is obligated to forward any bid, whenever it is made, to his principal and anything can still happen until a bill of sale is signed.
- Only accredited bidding systems may be used. Fair Bidding is accredited. Move (NVM) is not yet.
- For online bids with an end date and time (online bids), the bids may not be visible to the broker and the seller as long as the deadline has not passed. So this requires an adjustment in the system Move from the NVM.
- The way about how to file your complaint about unfair bidding practices now really makes no sense at all! See also this article. There should be a separate independent commission for this immediately, which simply has to deal with every complaint within a few weeks. Brokers (affiliated with a trade association) who cannot prove that they have acted according to the applicable honor code/code of conduct should be given a warning by the independent supervisory committee and, after repetition, a sanction.
- The government should allow the industry associations to pick this up and not interfere more than that. Government interference only works as oil on the fire.
