It’s common knowledge that the real estate market in Toronto is competitive, so it comes as no surprise that there’s been a rise in bully offers. But what is a bully offer? A bully offer occurs when a seller schedules a date to review offers, but a buyer decides to jump the gun and make a pre-emptive offer before that date. You may be asking, what’s the advantage of doing this?
If you’re a buyer, your goal is to convince the seller to agree to a lower price than one that might appear on offer night.
If you’re a seller, you might accept a bully offer if you think you won’t be getting a better offer on offer night.
Some sellers won’t even entertain the thought of bully offers because they prefer the bidding process that drives the price as high as it can go. Yet, I always advise my clients to at least look over the offer, so they can make a more informed decision. In fact, when I was representing a buyer recently, a rather serendipitous chain of events happened that confirms just how important it is to consider bully offers.
My client was interested in a property and wanted to make an offer on a Friday, even though the seller had set the offer date on the following Monday. In fact, my client was prepared to offer $150,000 over the asking price. Since there were 2 other interested buyers, the seller decided to wait until the offer date to make a decision. Over the weekend, both of those buyers bought other houses, so on the offer date, my client’s offer was the only one left.
Needless to say, my client now had the upper hand and the seller lost out on quite a bit of money.
Moral of the story? Be careful, and be sure to make an informed decision with the advice of a real estate professional.