No doubt about it: Toronto’s condo market can get competitive. There are many potential strategies that buyers can use when there are multiple offers on the table. But there’s one that I get asked about all the time—and that’s making a bully offer.
A lot of real estate terminology can cause confusion among buyers and sellers. That said, few concepts are as misunderstood as the bully offer. While many home hunters are aware that making one may be helpful in the right circumstances, they’ve often also heard that the practice can be looked upon unfavourably.
In this post, I’d like to clear up some of the misconceptions surrounding bully offers. If you’re about to buy a home, here’s everything you need to know about making this type of bid….
Bully offers: what are they?
Let’s start with the basics. In the simplest terms, a bully offer is a bid made for a home before the date specified. Often, when a property goes on the market, the seller will state in their listing that they won’t be considering any offers until a certain day. As a buyer, you can overlook these instructions and submit yours beforehand. If you do, you’re making a bully offer.
What are the advantages?
So, what’s the point of making your bid early? The hope is that the seller will see your bully offer, and (assuming it’s compelling) they’ll be tempted to accept it before the date they’ve set.
Buyers who make preemptive bids will create a timeline of their own. Typically, they’ll stipulate that the offer has to be accepted by a certain date—one that won’t provide much time for other buyers to be notified of the new development. The idea is to make the sellers sit up, take notice, and feel like they’ll be missing out if they let your bid pass them by.
When should you make a bully offer?
If you’re wondering whether making a bully offer is right for you, here are a few scenarios where you may want to strongly consider it.
Your offer is very attractive
Are you seriously considering a condo that other buyers want? Do you have the financial means—and the will—to bid high? If your offer could give a seller serious pause, it may be worth your while to submit it before the date they’ve specified.
You’re in love with the condo
If you’ve found the unit of your dreams, you may end up kicking yourself if you don’t employ a bold strategy to make it yours. The right bully offer could mean the difference between getting a seller’s attention, and being passed over on the offer date.
You’ve missed out before
You find the unit of your dreams, put in an offer, and wind up losing to another buyer. Some condo hunters have this experience more than once, and it can be very disappointing. If it’s happened to you before—and you can’t stand the thought of going through the cycle again—you may want to consider making a bully offer.
Are they fair?
You may be wondering if bully offers are fair to everyone involved in the process. The answer is, it depends on who you ask. Some sellers feel that these bids put undue pressure on them to make a decision. There are also buyers who believe that they give the people who make them an unfair advantage. There has even been some talk of banning bully offers in Ontario. Here’s my take.
While you can always make a bully offer, sellers have every right to ignore it. Their agent will have to notify them once you make it, but they can always stick to their guns and wait until the date they’ve specified. By making a preemptive bid, you’re simply giving sellers one more option to consider.
As for the buyers involved: someone is going to get the condo you want. Why shouldn’t it be you? Every other home hunter in the equation has the same opportunity to make a preemptive offer.
At the end of the day, a bully offer is like any other buying strategy: it has its advantages and its drawbacks. An experienced agent can help you decide whether taking this step is right for you!
Ready to buy a condo? I can answer all of your questions about the process—and help you find the perfect property. Call or text me at 416-500-5360, or send me an email at firstname.lastname@example.org and ask away!