A bully offer is a pre-emptive strike by a buyer wanting to get his or her offer in before the competition.
To best illustrate this let's say a house is offered for sale in Ajax for $530,000 the remarks accompanying the listing states that ALL offers will be reviewed on December 18th at 7 pm.
On December 15th a buyer's agent contacts the listing agent (seller's agent) to advise that he or she would like to submit a "Bully Offer" on the property. As the name implies this agent and her or his buyers are aggressively pushing their offer ahead of the December 18th date (when all other offers are to be reviewed). There is nothing wrong, illegal or immoral in presenting this pre-emptive offer to the sellers. The protocol is for the listing agent to inform the agents that showed the property that a bully offer is registered.
Typically in these situations the bully usually brings a large ticket price offer and an equally large attitude that says "here is my significant offer, take-it-or-leave-it by a specific date and time, thus putting pressure on the sellers to come to a decision in the bully's favour. If the bully is not entertained he or she may or may not participate in the actual schedule offer date.
The central reason why buyers submit bully offers is mostly they have lost out on several bids prior and they just want to avoid losing again or they have fallen deeply in love with a particular house and want to acquire is by any legal means necessary.
- You eliminate the competition - other prospective buyers
- You MAY get the house at a lower price than if you entered in an aggressive bidding war on the date specified
- The sellers could take the stance that a "bird in hand is worth more that 2 in the bushes" and accept your offer
CONS OF A BULLY OFFER
- You could pay more for this house just based on the assumption that there could be stiff competition
- The sellers could take advantage of your exposed desire for the property and demand unreasonable compromises
- You have exposed your hand prematurely the sellers know your motivation (this is a great concern particularly if your offer is rejected and you later participate in the scheduled offer date.)
Buyers should always approach this type of offer with caution and the right mindset otherwise they could put themselves at a disadvantage and regret it later. In any event there are certain elements that must be present in your bully offer in order to succeed - For more information and One-on-One consultation on how to submit a bully offer please click here to contact me.
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CENTURY 21 Percy Fulton Ltd., Brokerage*