Bully Offers In a Competitive Real Estate Market
Have you ever heard of the term "BULLY OFFER" in the world of Real Estate? It is a rare term that has become much more common with the competitiveness of our market this year. With Victoria's real estate inventory levels lower that ever, the frenzy of multiple offers taking place and the urgency to view property immediately before it already has a SOLD sticker on the sign, bully offers have become a favourable choice among home buyers.
Many Sellers when listing their property for sale are often delaying when they will review offers, giving as many buyers as possible an opportunity to view the property and hopefully initiating a bidding war with several buyers on the offer date. When this happens it pushes up the price to over asking. Buyers who have been beaten on homes when competing against other buyers are having to be a bit more strategic when offering on homes and some are submitting a Bully Offer.
A Bully Offer definitely lives up to its name, basically pushing aside anything in its way in order to get the deal done to secure a property before allowing others a real chance at it. Some may call it aggressive, others a smart business move. A Bully Offer is essentially a pre-emptive offer where the buyer, in hopes of avoiding competition, would be willing to write a condition-free offer that is significantly more than the list price. If a Seller decides to accept the Bully Offer, the set offer review date would then no longer be applicable.
Because there is no guarantee of receiving offers when setting an offer review date, or at least not ones that may be as high as the Bully Offer, accepting a Bully Offer can often be in the best interest of a Seller. It is a bit of a risk however, and you will need to be someone who is ok with waiving the option of seeing if a better offer would have come in on the originally scheduled offer date. If the Seller is satisfied with the Bully Offer and it is beyond what was expected, one may be happy leaving it at that.
Fear of the unknown can often put pressure on a Seller and Bully Offers can be the icing on the cake. If a Bully Offer presents itself, it will be a conversation between the Seller and their agent to decide what the best option is for them. It is the Sellers choice whether to proceed with the offer or not.
In this hot market, offer review dates have been standard practice in the way our market has shifted. Gone are the days of offering a price for a home based on what similar homes have sold for. Buyers are paying the maximum they can afford just to secure the home they want to buy, even it if means over paying for it. This trend will continue until the market shifts and becomes a Buyers market. But for now, Buyers are forced to adapt and need to be prepared of new ways of buying a home for some time to come.