Unsolicited offers

What is an unsolicited offer?

An unsolicited offer is when a company or a person asks to buy your property when it is not on the market. Often, the request comes directly through the entity that wants to make the purchase without the involvement a real estate agent.

An unsolicited offer might be delivered to you by mail or promoted in your community to entice you to sell your home.

Unsolicited offers may come from a builder, developer, or even just an individual looking to buy a home without having to compete with other buyers.

Why might someone be interested in an unsolicited offer?

There are several reasons why someone might be considering accepting an unsolicited offer. Often, potential buyers will target neighbourhoods with senior citizens or others who may be looking to downsize or relocate. Unsolicited offers might include long closing periods, which can be appealing to some potential sellers.

A particularly common reason, however, is that the offer to purchase will allow the seller to avoid the costs of a real estate agent. While this may seem like significant cost savings, it also comes with risks.

Who has oversight over an unsolicited offer to purchase?

It is important to know that RECO does not have oversight over unsolicited offers that proceed without the involvement of a real estate agent. RECO is the regulator that enforces the Trust in Real Estate Services Act, 2002 (TRESA), which governs the conduct of real estate agents and brokerages in Ontario. Issues with transactions that are undertaken without a real estate agent would be matters for civil litigation through a real estate or other lawyer.

Am I getting the best price?

It is possible that the company or person looking to purchase your home intends to sell it for a higher price, before they even take possession. This is known as “shadow flipping” and while it is not illegal in Ontario, the practice can sometimes mean that you are not getting the best possible price for your home. Sometimes, unsolicited offers made with this intent contain a clause that the purchaser can back out of the transaction at any time (usually if they are unable to sell the property themselves).

Are there clauses in the transaction agreement that will allow the buyer to back out?

Some unsolicited offers contain clauses that permit the buyer to back out if they can’t resell the property quickly. This can present significant challenges for a seller, especially for those who need to sell quickly or have already purchased another property.

What can I do if I have concerns?

RECO strongly urges those who decide to accept an unsolicited offer to take the following important steps:

• read your contract carefully, including the terms and clauses in your contract, and
• seek the advice of a real estate lawyer.

Remember, for any issues with a real estate transaction that does not involve a real estate agent or brokerage will be a matter of civil litigation as RECO does not have jurisdiction to assist.