We’ve gone on fairly at length about how the Real Estate Market continues to hold strong in the face of the last 7 months of economic adversity in Canada, and one of the things that we’re seeing is that the ‘pent-up’ demand of buyers is creating some not-so-ordinary buyer tendencies given the fact that demand continues to outdistance supply in that part of the equation. Add pent-up demand and what we’re seeing is buyers who may be even more willing to do what it takes to get the home they want.
For some, that means being a bully, and having their realtor submit ‘bully’ offers. It’s been said no one like bullies, and fair enough. But if you’re a real estate agent in Canada it’s best to always be very much in the know about the workings of your business. It’s to be expected if you’re to ask any of the many hundreds of people who’ll be looking for a realtor in Canada, even before this crazy 2020 is through. You need to be the expert, and come across as one. But getting to be first in-touch with prospective clients isn’t easy, this is always going to be a competitive business.
Especially in major metro areas, and that’s why our online real estate lead generation systems for Canada realtors here at Real Estate Leads is the type of powerful ally it is in that regard. You’re given more of the opportunity to make those contacts, but then the chance to show how you’re the best professional to help them with buying or selling a home is entirely up to you.
So of course wide-reaching knowledgeability is a big plus there. If you’ve never heard of a Bully Offer, it’s one of hundreds of different insights you can and should gain into the business.
So let’s get to it.
Pre-Emptive Buyers
A bully offer is also called a pre-emptive offer. What that means is it’s an offer from a buyer to the seller to purchase a home listed for sale on MLS. Nothing unique about that, but with the bully offer it’s an offer that’s submitted before the date that the sellers have indicated they will look at any of them.
Keep in mind that the seller is free to accept any offer on their home, at any amount, at any time. Any given and suggested date for ‘consideration’ is just a statement and there’s nothing contractually binding about it.
In any real estate market that is a seller’s market – where there are more buyers than homes for sale – folks with homes for sale may make the decision when they list their home to hold on offers and wait until a certain date and time to review them. In truth it’s often a smart strategy for a seller who has properly priced their home. It allows the most buyers possible to see the home, and increases the chances of a bidding war starting and potentially driving the selling price up.
The bully offers is a high pressure sales tactic on the part of the buyer, and it’s intended to make a home seller look at the offer quickly with not much in the way to make other interested buyers aware of what’s going on.
Maybe a house is listed for sale on Wednesday. The plan is to allow it to be for sale for an entire week and then offers will be accepted the following Wednesday. By holding offers the agent increases the opportunity to market the home and increase the number of prospective buyers who’ll be aware of it being on the market at a specific price.
Should that real estate agent receive an offer on the home from another agent, but with he provision that the offer will expire before the owner’s stated window for accepting offers, you’ve got yourself a bully offer.
No Obligations
It’s important to first understand here that you and your client are of course under no obligation to accept the offer. The issue is when the bully offer comes with a proposed price that’s attractive to the homeowner. And that’s usually how it’s both intended, and how it works.
Once a bully offer is submitted, your client can choose to accept it, start negotiation, or stick to your original plan and refuse to deal with it until their stated original offer presentation date.
The question then though is are there good scenarios for accepting a Bully offer?
Buyers and their agents know that in order to get your client to accept their bully offer, they’re going to have to make it worth your client’s while. This usually means offering above asking price and with little or no conditions on the sale.
But you – as their agent – should be able to quickly determine if a bully offer is worth accepting. Some considerations:
- When the price is ridiculously high
- When showings are slower than expected, or home is listed in volatilely changing market
- When the offer is firm
- When you have notified every other buyer who has expressed interest in the property
We’re going to steer clear of any discussion about whether it’s ethically OK to make bully offers. That’s up for you to decide as a realtor. But if you have reason to believe that making one puts your client in the best position to get the home they’re after, it may be something for you to consider. Be judicious about it though, and proceed cautiously if you have reason to believe it will rub the selling realtor the wrong way.
It’s important to always remember that this is a business where it’s very important to get along with others also making their living in real estate. That said, nearly all realtors will be receptive to approaches that help them get clients into the homes that fit them best.
Making a Bully Offer
For those of you wondering on how to make a bully offer, real estate bully offers are no different from regular offers. All that you and your client are doing is disregarding any written instructions on the MLS that say the listing is holding offers. You are submitting your offer early, in an attempt to avoid competing with other buyers. Of course the seller is under no obligation to even acknowledge your client’s offer of this type, much less have to accept it. Keep in mind as well that you – the realtor – are required to convey your offer to the seller and notify all other interested parties.
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