Buying a home in Guelph isn’t easy these days. It’s a hot seller’s market, with a shortage of inventory. I’m generally offering guidance to my buyer clients along the lines of, “get ready to dig in,” and “be prepared to offer on a few homes before we land ‘the one’,” and so forth. In the current Guelph real estate market, buying can be a real challenge.
It’s a frustrating situation to be in, especially for those who are really ready to buy a home in Guelph. It’s easy to get discouraged and to be tired of the low inventory of homes – and even more tired of bidding wars.
It hasn’t really come as a surprise to me, then, that – twice in the last couple of months – I’ve had clients ask me about the possibility of putting in a bully offer on a home that is for sale.
What’s a Bully Offer?
It goes a little something like this:
A Seller puts their home on the market and instructs their real estate agent to hold off on reviewing offers until a certain date. They want to give the market a chance to view the property, weigh in, and ideally give agents time to bring forward a buyer (or two, or three….)
Realtors accordingly advise their Buyer clients that they can view the property, but offers won’t be reviewed until the date chosen by the Seller. However, in reality (at least in Ontario) is that, if a Listing Agent receives an offer on a listed propert, he or she must present that to the Seller client at the earliest practical opportunity. In other words, the Listing Agent can’t refuse the offer or refuse to share the offer with the Seller. They must present it for the Seller to review. In these cases, typically, the bully offer would be sent in with an irrevocable date (i.e. required timeline for Seller response) that ends before the stated time for reviewing offers.
And that’s why we call it a bully offer. Essentially, it’s a strategy that forces both the Listing Agent and the Seller to look at an offer before they actually want to look at any offers.
Can the Bully Offer Strategy Work?
It can, but it can more commonly backfire.
In a market like we’re seeing, it makes very little sense for Sellers to consider a bully offer – even if it’s a terrific offer. Guelph is in the midst (and has been for some time) of a hot Seller’s market. Does it make sense for someone to accept an offer, rather than put the property out to market and let the Buyers compete? Not really.
With a bully offer, odds are good you’ll aggravate the Seller (and the Realtor) and that, you’re asked to come back to the table on offers-day with everyone else, your pushy tactic will not be remembered fondly. Will that help you “win”? Likely not.
From the Listing Agent’s perspective, there is another consideration. If I’ve marketed and positioned a property as holding off on offers and then I go and accept one – how does that affect my reputation? And, let’s be very clear, reputation is everything in this business. No matter how much you “know,” if your name is mud, you’ll struggle every day.
I’ve been on the other side of this equation, and it was awful. I had Buyers interested in a property and we waited patiently – as instructed. The Seller did take a bully offer and believe me it was an unbearably painful conversation to have with my clients. Essentially … you lost the house because someone skirted the rules posted and scooped us all. My clients felt that the Listing Agent had acted unfairly and they wondered why we hadn’t refused to play by the rules.
Does the real estate profession need more bad apples and bad publicity? No. We should be elevating the profession – treating everyone with fairness and keeping the playing field as level as possible.
Bully offers? I think the word says it all – and isn’t it time for the reign of the bully to end… in every context?
