If you are a buyer looking to buy your first or next home in this busy real estate market, then you may have heard of a “Bully” offer. The proper terminology is “Pre-emptive” offer. What this means is this … a property is put on the market and the sellers and the listing agent decide on a future date and time to review offer(s). During the days of showing prior to the offer date, a buyer instructs his/her buyer agent to present their offer to the seller prior to the offer date. The listing agent then informs the seller that there is an offer signed and registered that would like this offer presented now and not on the offer date. At this point, the seller has the option to review the offer now and decide to entertain this offer as well as inform all of those agents and buyers who have seen the property up until that point, that a pre-emptive offer has been communicated. In all fairness to the other prospective buyers, the seller should give everyone a chance to present their offer as well if they wish to. Usually when a pre-emptive offer presents itself, the buyer only gives the seller a few hours to decide, rather than a full day.
There are disadvantages to reviewing offers prior to the offer date that was originally set and published on the listing:
- It does not give all prospective buyers enough time to view the home and think it through before deciding whether to make an offer or not
- It may influence an impulsive decision for the buyer and they may regret making their offer the next day
- The seller may have not had the opportunity to get full market value for their property by not following through with the original offer date
- The seller is limited to the number of offers by shortage of time
- The advantages usually are for the buyer to compete with less offers and may put pressure on the seller to accept earlier than the offer date.
The Seller in all cases, if represented professionally, can refuse offers and are not obligated to sign any offers that they do not feel comfortable with.
There are advantages as well, the seller may be happy with the offer and wish to end the stampede of showings through their home of prospective buyers and open houses. I had a case recently where I had a listing for $950,000 and 24 hours after listing it on the MLS, a pre-emptive offer came in $100,000 over asking. The sellers and I reviewed the offer, contemplated the decision, and refused to entertain the offer. On the offer date, 4 offers were presented and this property sold $210,000 over the asking price! The buyer with the pre-emptive offer did not comeback to compete with the other offers and cooled off. My sellers were happy with their decision and the selling price was record breaking for the street.
Should you have further questions regarding pre-emptive offers, feel free to contact me at anytime via email or my direct number.
Stacey Robinson, Real Estate Broker
Royal LePage Realty Plus