A bully is defined as “a person who uses strength or power to harm or intimidate those who are weaker.” Bullies aren’t just found in the schoolyard – they’re out there buying houses and making bully offers.
In the intense competition for “good houses” in Toronto, bidding wars are the norm these days. In a Seller’s market Sellers have control – many strategically set their asking price and conditions in the hopes of generating multiple offers on a Magic Offer Date set by them. More About Bidding Wars Here
Bully offers, also referred to as pre-emptive offers, occur when a Buyer tries to short-circuit the process set out by the Seller and re-take control.
So Mr. Seller, you want to review offers in 6 days? I’ll see you in an hour.
You want time to review my offer? You get 30 minutes.
You want how much for your house? I’ll offer you way more – you won’t say no to all those zeroes, will you?
The Bully Offerer is hoping that:
- a minimal number of people have seen the house, thus interest will be lower than it will be in 7 days
- those who have seen the house and are interested will not be able to pull together an offer fast enough to compete – and if they do, that they won’t have had time to get their financing and home inspection done, thus making the Bully’s offer stronger
- The Seller gets so excited by a big number and is so intimidated by the process that they accept his offer
We represent a lot of Buyers, and a bully offer can be a way of almost guaranteeing that the house they’ve fallen in love with will be theirs. It might mean paying more for a house – or it might mean getting a bargain. It all depends on the Selller and the skills of the Realtors.
We always counsel our Seller clients who are trying to get multiple offers (ie bidding wars) to resist the urge to look at offers until the Magic Offer Date. We know that Bullies are trying to circumvent the process and are hoping to get the house for less money than they might in a bidding war. In almost all cases, if a Buyer is ready to make an offer today, they’ll be there next week on the Magic Offer Date. What’s good for the Bully is rarely good for the Seller.