I will get right to the point with this article – I hate bully offers. In fact I despise them, almost as mush as I despise the TV show 19 Kids And Counting or Teva style sandals. As an agent who spends alot of time working with buyers I wish they would just go away forever, or better yet be beaten and tarred and left in the mid day sun.
Recently a colleague of mine had buyers interested in a property in the east end. The listing came out on Tuesday and they went to see it on Wednesday. They liked the house, enough that they scheduled a home inspection for Saturday morning, and barring anything major coming up they fully intended to place an offer on the advertised offer night of the following Tuesday. My colleague then went about his week as normal, until he received an office page on Friday night from the listing brokerage saying the property had been sold and his inspection had been cancelled. So what the hell happened?
What happened is that the sellers accepted a bully, or pre-emptive offer, and in the process a RECO (Real Estate Council Of Ontario) violation took place. I should add that the sellers did nothing wrong, of course, and that bully offers are completely legal. But if a bully offer is to be accepted (or even considered) there are certain requirements – the most fundamental of which is that any agent who has shown the property (or booked a showing) must be made aware of the bully offer so that their buyer may be at least given the opportunity to put together their own offer, if there is time. The last line is key, because what often ends up happening (if the proper process is followed) is that an inadvertent offer night materializes. The listing agent will say they need till 8 pm because they can’t reach the sellers (which is a lie of course), and then spend the next few hours trying to drum up as many offers as possible to present at 8 pm as well, which is exactly what would happen on the originally set offer date.
The guideline below is what our team follows in the event of a bully offer (and I didn’t add all the caps).
You MUST get the showing report from the front desk and page EVERYONE who is on the list. IT IS IMPERATIVE THAT EVERYONE IS PAGED THE FOLLOWING:
BULLY offer on 123 ANY street, presenting at (whatever time) (whatever date), please call (lead agent) at (their cell) with any interest.
This obviously didn’t happen with my colleague, and he was obviously understandably enraged. He could have lodged a complaint with RECO, sure, and maybe you can lodge a complaint with Rogaine if your hair doesn’t grow. But at the end of the day no complaint would bring the house back, and after speaking with the extremely apologetic listing agent it turned out that he wasn’t paged due to a a simple administrative error. I guess it happens, and I like to give my colleague a hard time by telling him that if he had only convinced his buyer to make his OWN bully offer maybe this would have never happened…
In a market that is so stacked against buyers, do we really have to make it harder? The sellers hold all the cards, so why not at least make them stick to a set offer date if they specify one on MLS?. I smile when I see the following sentence on just about every listing right now: Seller Reserves The Right To Review Pre-Emptive Offers. You reserve the right, do you? Why not just say bring me the first bully offer and if it is completely insane I will accept it? It becomes like a kid’s game – maybe our offer date is on Tuesday and maybe it isn’t (wink wink). What else are they being coy about?? Maybe all the knob and tube has been removed and maybe it hasn’t (wink wink). Maybe I was just experimenting in college and maybe I wasn’t…you get the point.
At the end of the day I know this is a fruitless rant, and I WILL advise clients to make bully offers if circumstances dictate (if you can’t beat ’em you may as well join ’em). But I certainly don’t have to like the process, and if the day came that bully offers were eliminated I, for one, would applaud.