Since Jan. 1, 2023, brokers must use an online bidding system where an online bid log is maintained and can be viewed retrospectively by all bidders. But very often this does not happen or deals are still made outside the rules of this bidding system.
What about this and what can you blame the broker for in this?
That’s a good question! We figured it out for you and here we explain it to you in simple terms.
The game rule of the bid log
Most brokers in the Netherlands are affiliated with one of these three brokerage clubs: NVM, VBO or VastgoedPro. For these brokers (affiliated with NVM, VBO and VastgoedPro), as of Jan. 1, 2023, they are only allowed to sell homes through an Online Bid System and with a bid log. For all real estate agents not affiliated with such a real estate association, this rule does not apply. Please note that this requirement of Online Bidding is NOT a legal obligation. It is only an obligation of the industry associations NVM, VBO and VastgoedPro.
Now to the practice where things are still not going well. We’ll first give you a few common situations (where happens) and then explain the implications for all parties.
Failure to follow the rules of the Online Bid System/ Online Bid Log.
Situation 1: Bidding late and not through the bidding system
A broker affiliated with NVM/VBO/VastgoedPro makes a bid by e-mail after a registration has closed. This even though it was clearly communicated by the selling broker that bidding was only allowed through the Online Bidding System. So the buying broker sends the bid in the wrong way ánd too late (when the deadline is already closed).
Situation 2: Overbidding after the home is already sold
The selling broker has already congratulated a buyer on the purchase of a home and also confirmed this purchase by email. The selling broker informs all the other bidders that they didn’t make it. Then the selling broker gets a new and FAR BETTER offer via email from someone he just called off.
Situation 3: the purchase price in the land registry is not the same as that in the bid log
Suppose you bid on a property through an online bidding system and you didn’t get it. After several months, you find out through the land registry that the purchase price paid is much higher and also does not appear in the bid log you received.
The response of the disputes committee
We submitted these questions to “the Disputes Committee” of these 3 industry associations.
The disputes committee says that, oddly enough (now 6.5 months after the bid log took effect), there have been no rulings on such situations.
Therefore, I ask for their views on these 3 outlined unfair practices.
The spokeswoman for the Dispute Resolution Committee indicates on our 3 situation note that the use of the bid log is not required by law. So you as an interested party cannot hold the broker accountable for that.
Furthermore, the Disputes Committee emphasizes the rule of the written requirement: “Parties just have to be very aware that as long as a purchase agreement has not been signed, there is no sale yet. Until the signatures are under a purchase agreement, anything can still happen and that is how the law is in the Netherlands.”
On the selling broker’s culpability, the Disputes Committee says the following:
“Ultimately, selling party has the final say. The selling broker only advises. If, after a home is sold verbally (and possibly confirmed in writing by mail), there is still a substantial overbid, the selling broker is always legally obligated to pass this bid on to the seller. If the seller chooses to go for that higher offer, the seller has the final say on that. The selling broker is not to blame in this. However, the selling broker would be wise to state as clearly as possible at the time of sale (for example, in the sales brochure) that the there is no “sale” until the deed of sale is signed.
In this sense, the same applies to the buying broker as well. If he is instructed by his client to still place a much higher bid after the bids close, then the buying broker is not to blame for that act.
Further, the question is always whether there is “culpable conduct” by a broker. Legally, almost anything is allowed as long as there are no signatures. But a broker’s trade association may also have an “honor code. Like this code of honor from the NVM. If you, as an interested party, believe that the broker has not followed the honor code of its own trade association, you can file a complaint for that with that broker’s own trade association.”
Conclusion
There is a lot of fuss about Online Bidding and the Online Bid Log. It seems like it has all become a lot safer and fairer, but nothing could be further from the truth. As a home buyer, you often still have your back against the wall. If a broker really has not been honest and if that is in violation of his industry association’s code of honor, you can file a complaint with that industry association. When it comes to the Disputes Committee or let alone the Disciplinary Tribunal, it seems that complaints about not following the Online Bid Log stand little chance.
Disclaimer:
Multiple sources (but especially the Dispute Resolution Committee itself) were used to arrive at the content of this article, but the author cannot guarantee the complete accuracy of the information cited. Use of the information contained in this article is therefore entirely at your own risk and the author shall not be liable for any damages arising from such use.