A good portion of houses in Toronto are generally still selling in multiple offer situations. Typical strategy by home sellers is to allow showings for 6-7 days, 2 open houses, maybe an agent open house then followed by a date where all interested buyers come in with their best offer.
In very desirable neighbourhoods, some buyers are not adhering to these protocols. Instead they are submitting a pre-emptive offer, otherwise known as a bully offer. This is when a buyer registers their offer and submits it to the seller before the offer date. The listing agent legally has to present this offer to the seller unless the seller states that they will not look at any pre-emptive offers and it is stated on the MLS data sheet. If a bully offer is presented the seller can decide to accept the offer or not work with it. The bully offer has to be really tempting to the seller so that they forgo waiting till offer day where competition between buyers will and can drive up prices.
For a bully offer to be worth while :
- Must be free and clear of all conditions
- Deposit is included with offer and is at a minimum 5%
- Offer price should be high enough to make the Seller accept it – usually over what comparable properties are selling for in the area
Bully offers only work if the offer is very very strong and clean. With the way the market is changing, it’s very tough to estimate how many buyers will be competing on offer day. I have been seeing more and more buyers trying to avoid the offer day and will come in the day following the offer day if the house is still on the market.
Contact us anytime regarding bully offers and multiple offers situations at firstname.lastname@example.org