I have been asked many times what the term Bully Offer means in real estate. So what I’ll do in this article is explain the term in simple language, how bully offers work and I will explain how to guard against unethical behaviour that is sometimes associated with the term.

What is a Bully Offer?

A bully offer, also known as a pre-emptive offer is an offer from a buyer to the seller to purchase a home listed for sale on MLS that is submitted before the date that the sellers have indicated they will look at any offers.

In a hot seller’s market where there are more buyers than homes for sale, many home sellers make the decision when they list their home to “hold offers” and wait for a certain date and time to review them. This is a smart strategy for a seller who has properly priced their home, as it allows the most buyers possible to see the home, and increases the chances of the sellers getting a bidding war and (in some cases) driving the selling price up.

In response to the increase in sellers holding offers on their listings as a tactic to get multiple offers, bully offers are a high pressure sales tactic on the part buyer, designed to get you as a seller, to look at their offer quickly with little time to react or notify other interested buyers.

To give you an example, let’s say that you listed your house for sale on Thursday. The plan is to allow it to be for sale for the weekend and you give your realtor instructions that you’ll accept offers the following Tuesday.

Holding offers gives your agent a chance to market the home and expose it to the most amount of buyers possible. However on Friday night, after only 1 day on the market, your real estate agent calls to tell you that you have a bully offer and it’s only good until Friday at midnight. This is the meaning of a bully offer in real estate.

Before I continue on, as a seller you are under no obligation to entertain a bully offer. The only “obligation” in this whole process is that your real estate agent is required to present all offers to you. Whether you chose deal with this bully offer or not is up to you. Not the buyer, and not your real estate agent.

Once a bully offer is submitted, you as the seller can choose to accept it, start negotiation, or stick to your original plan and refuse to deal with it until your original offer presentation date.

Should You Accept a Bully Offer?

There’s no right answer to this question, and in many cases bully offers tend to be very good! Buyers and their agents know that in order to get you to accept their bully offer, they’re going to have to make it worth your while so this usually means above asking price and with little or no conditions on the sale.

As a seller, it’s critical that you know the market value of your home ahead of time. Many real estate agents like to list their clients homes low in order to generate multiple offers and look good on their sales statistics. You need to know when a bully offer is worth taking.

For example, if the market value of your home is $700,000 but you listed it for $599,000 and you receive a bully offer for $675,000, that’s not really a good offer. You’re better to let the process play out if you’re getting a lot of interest and buyer showings.

When it’s a good idea to deal with a bully offer?

When the price is ridiculously high.

When showings are slower than expected or the market is changing.

When the offer is firm.

Only after your agent has notified every other buyer who has expressed interest in the property.

When it’s not a good idea to deal with a bully offer

The offer is not ridiculously high

You have a ton of traffic and the feedback that is very good, and you expect a large number of offers on offer day.

You’re agent doesn’t have enough time to notify all other interested buyers that an offer has been submitted.

How to Make a Bully Offer – For Home Buyers

For home buyers wondering on how to make a bully offer, real estate bully offers are no different from a regular offer. The only difference is that you’re 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.

While the seller is under no obligation to deal with your bully offer, their realtor is required to convey your offer to the seller and notify all other interested parties. In order to ensure your offer is presented, ask for a signed copy of the form 801.

Are Pre-emptive Offers Ethical?

In terms of the law, you’ll be hard pressed to see anything officially explaining the term “Bully Offer”. That’s because there is no official system in place for dealing with offers. For you the consumer, the only thing that counts is an accepted agreement between the buyer and the seller, and the terms of that agreement. That’s it.

However for realtors, we do have rules and a code of ethics that needs to be followed. If instructions appear on the MLS telling other realtors that you will not accept an offer until a certain date, it’s expected that you the seller and your realtor will abide by them- it’s only fair.

The problem is that not all real estate sales people always behave ethically. Greed and opportunity sometimes blind people which causes them to make less than ideal decisions.

Many times this has to do with the selling agent having their own buyer, thereby giving them the chance to ‘double end’ the sale and get both sides of the commission. I’ve experienced this a number of times and I question why any seller would agree to deal with a bully offer when their original strategy was to wait to ensure as many buyers as possible have a chance to see the property.

The Final Word on Bully Real Estate Offers

I hope you found this article useful in explaining what a Bully Offer is. As a seller, it’s important that you know how the process works, and also that you have a very good idea of the value of your home based on research and evidence. This is the only way you can truly make an informed decision!

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