THE BULLY OFFER
The Real Estate market is hot and if you’re a buyer, you’re probably on your 2nd, 3rd, 4th or 12th offer! The frustration builds as you offer over the asking price, make it clean with as few subjects as possible and still… someone else gets it. Or, even worse, the listing Realtor tells everyone that the seller will be reviewing offers on Wednesday and then your Realtor lets you know that the seller accepted an offer on Monday – the dreaded Bully Offer.
A preemptive offer, commonly referred to as a bully offer, is an offer presented before the published date that offers will accepted on. They can be a good tool to use when presented properly and in a busy market we see these coming on a regular basis. So why wouldn’t everyone ask to present their offer whenever they wanted? First – it flies in the face of fairness and yes, even when large amounts of money are involved, some sellers feel that this is not a ‘fair’ practice and will refuse to accept the offer and in some cases, if they are pushed too hard, just not sell to that person. If that same offer comes around when all the offers are being reviewed as planned and the offers are close, it now has a strike against it.
A bully offer may also not be the best offer for the seller. If I was to summarize preemptive offers, they are usually at or above asking price, have flexible closing dates and have no subjects or conditions. That is compelling for the seller – if they sign the offer, their home is sold.
In a recent situation, a home was listed for sale and the listing realtor posted that offers would be reviewed in 1 week. Day 2 of the listing, a preemptive offer came in – $50,000 over asking and subject free. The seller was very happy and ready to sign but their Realtor had a good long chat and they decided to hold off until the posted date. One week later, multiple offers came in and a subject free offer $150,000 over asking was accepted! Now the seller was over the moon. Have they taken the earlier offer, they would have missed out on $100,000.
I’ve had them presented to me, I’ve written them, I’ve won some, lost others and at the end of the day, if I’m representing the buyer or the seller, I look to give them the best advice at the time. There’s no easy answer and one solution doesn’t fit every situation.
If I’m representing the seller, my advice is “If they are willing to give us this offer today, they will almost always be willing to give us the same offer in a week – lets wait”. And, if I am representing the buyer – I advise that if they are able to, write over asking and subject free but be courteous and present it in a compelling way – sometimes they work.
Its a sellers market with anywhere between 2 weeks and 1 month of inventory for sale (ie: if 100 homes sell every month, there are between 50 – 100 homes on the market at any one time). This is as tough as it gets for a buyer and I expect that the Spring will see the inventory climb slightly and possibly even a bit more in the summer.
As always, I welcome your comments and thank you for reading this far – Here’s a link to a video we did on Bully Offers: CLICK HERE