What Is A Bully Offer?
Simply put, a bully offer is an offer that is submitted by a buyer before the offer deadline. This is also known as a pre-emptive offer.
How Does A Bully Offer Work?
Throughout the GTA and Durham Region, we’re experiencing a hot seller’s market and a common selling strategy is to hold offers. Holding offers means that all submitted offers will be held until a specified date and time before being reviewed by the seller. This allows for the most optimal amount of showings and works to generate competition on a property. Typically, a home that is holding offers will end up with multiple buyers at the table and can contribute to an increased sale price. In certain scenarios, a qualified buyer might opt to submit a bully offer that expires before the deadline for offer submission.
Determining Whether To Make A Bully Offer Or Not
There are a few considerations to make when considering whether or not to make a bully offer. First and foremost, you need to have financial backing, You also need to be eligible to wave any conditions (financing, home inspection, etc.). The industry term for this is going in firm.
Secondly, you will need to submit a purchase price that is competitive, which means going significantly over asking. By going over asking, you’re signalling that you are serious about purchasing the home. In addition to going over the list price, a heft deposit may work in your favour. Lastly, you will need to appeal to the seller’s suggested closing date. Sure, money talks but the seller may have a non-negotiable closing date in order to accommodate the purchase of another home.
Does Submitting A Bully Offer Mean There Won’t Be Any Competition?
No. Bully offers are submitted in hopes of beating out the competition but this depends on when you’ve submitted the pre-emptive offer in relation to the listing going live. If you’ve seen the home the first day it hits the market and submit your offer right away, you might be successful. Conversely, if you submit your bully offer 4 or 5 days after the listing is live, there may already be enough interested parties in the mix. In this case, the selling agent may call the other prospective buyers and indicate that they have a bully offer. This prompts the buyer’s agent to submit a bid before your bully offer expires. If a bully offer is part of your buying strategy, you must be one of the first showings at the home. Getting your offer in right away paramount.
Why Should You Not Have Any Conditions When Submitting A Bully Offer?
Eliminating conditions from your bully offer is what makes it appealing to sellers. Conditions mean that they need to take their home off the market while conditions are fulfilled. For example, if your offer contains a financing condition, the listing would be taken down during the mortgage underwriting process. Should your financing quest be unsuccessful, the seller will have to relist their home and hope that previous parties are still interested.
How To Navigate An Unsuccessful Bully Offer Attempt
Bully offers can be a great way to beat out the competition but they can also be unsuccessful. If your original bully offer is declined, you have the option to resubmit for the offer deadline.
You don’t have to go it alone. If you’re looking to make your next move, we’re here to help!