What is a Bully Offer?

How do bullies operate? They intimidate their target by making them feel nervous, even afraid. In the real estate market, bullies know one thing sellers are scared of: not getting the best price for their property- or worse, having it linger on the market, not selling.

The ideal situation for the seller is attracting multiple offers in a bidding war, which will ultimately drives up the sale price.  

That is NOT the ideal scenario for Mr/Ms Bully. They want to beat out other potential buyers in advance and score the property for a good price (which is likely a lower price than it could sell for if more buyers start putting in offers). 

This is where the “Bully Offer” tactic comes in, especially in a market as competitive as Toronto. A property’s listing agent will set an Offer Date when interested buyers can present their offer. The seller hopes to receive multiple offers at this time. The Bully will swoop in with an offer before this date, or even before an open house. They do this for two reasons:

• To shut out competition and avoid the (seller’s ideal) multiple offer scenario. 

• To get the property for a lower price than they might have on/after Offer Day.  

Should you accept a Bully Offer? Should You Make a Bully Offer?

The Bully Offer is designed to be tempting, and also intimidating. The "bully" will often come in at a solid price but set a short timeline for the seller to accept. Realtors can best help a seller determine whether they should or shouldn’t take the bait in their individual situation. They can also help a buyer decide whether a bully offer might be the tactic that will work. 

It comes down to various factors, including:

• Has the property been gaining attention from real estate agents and buyers- how many have called about the property/booked a showing? 
• If there was an open house first: how many people toured the property and how many seemed interested after a tour?
• What is the current state of the Toronto real estate market? Is is a buyer's market or a seller's market? 
• What have other comparable properties sold for? How many offers did they receive? 
• For buyers: How motivated is the seller? Are they hoping to sell fast?

The main thing to consider however, is that the seller wants to get top price and the Bully wants to shut out competition, which can lead to a higher price for the seller.

Therefore if you're a seller, after discussing the above questions with your real estate agent, it could be a good idea to reject the Bully Offer. They are hoping to intimidate you into NOT seeing if you can get a higher offer. 

Plus, you may see Mr/Mrs Bully again on Offer Day anyway, when it’s you that has the power.