I’m a stats guy.   I always have been.

I often have trouble sleeping, and in an effort to not go on my phone (apparently screen-time before bed keeps you awake), I’ve put together a sports almanac of sorts, and I keep it in the nightstand.  This book, which is over a hundred pages, is literally a culmination of all the Microsoft Excel spreadsheets that I keep, and update regularly.

And not just the winners of the Stanley Cup, Superbowl, World Series, and NBA Championship since their inception.  I’m talking all the stats for the four major sports, and I update them at the end of every season.  Hockey?  How about 500 goal scorers, 1000 point scorers, then a sheet of the Top-25 of every major stat within the sport.  Plus some sheets for the Olympics, the 1972 Summit Series, World Juniors, and about a dozen more.

I’m not even a tennis fan, but I love stats.  So naturally, I have lists of the winners of all four Grand Slam tournaments dating back to the 1800’s.  I don’t watch tennis, but I sure do update my spreadsheets after each Grand Slam!

While not the most environmentally-friendly, I re-print these sheets, collate, and bind into a new book every 3-4 months.

And there I lay at night, looking over the winners in Women’s Gymnastics at the Olympics in 1996.  Remember?  Atlanta?  The Magnificent Seven?

You might say, “David, you have too much time on your hands,” except that I don’t.  Time is a commodity that I would pay dearly for, if I could.  I think they made a movie with Justin Timberlake about that…

It’s my obsessive-compulsive disorder combined with my knack for memorization, and of course, love of sports, that feeds this Excel-wielding beast.

And that’s only the sports almanac side of my OCD.

When it comes to real estate?  Oh boy, I don’t even want to tell you how many spreadsheets I have…

On the topic of bully offers, I have a list of every single bully offer I’ve ever made, and every bully offer experience I’ve ever been in.  I also have a list of every offer (bully or otherwise) that I’ve ever made, and how many competing offers there were, the win/loss success rate, etc.  But for today, it’s the bully offers I want to discuss.

So far in 2020, I am 4-0 in bully offers.

That means I have submitted four bully offers on behalf of buyer-clients, and I have won four times.

But in order to win, you have to get the listing agent and the seller to decide to “work with” the offer, meaning move up their offer date.

So I’m 4-0 in moving up offer dates, and then 4-0 with regards to success thereafter.

And the distinction needs to be made, after all.

If you submit a bully offer on a property, there’s no guarantee that the seller and the listing agent are going to move up the offer date.  Say there’s a $999,900 listing and you submit a pre-emptive of $1,150,000.  Is that enough to move the needle?  It depends on the property, and it depends on the seller’s expectations.

Then even if you do succeed in moving up the offer date, there’s always a chance that another bid comes in and beats yours.

I’ve been there before.  It sucks.

We call this “beating the bully” when it happens, ie. another buyer agent submits a bully offer and gets the date moved up, but then you come in and beat their offer on behalf of your buyer client.

I’ve done both before, but it hurts when you’re the bully, and you get beat.  Ironic, and at times, just.  But it hurts.

So far in 2020, I’ve seen just about everything there is to see with respect to bully offers, and much of it has been through my own experience.

Here are a few stories from the first two months of the year…

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Play The Player, Not The Game

Do you know that expression?

It’s common in poker, where the idea is that you’re playing the player across from you more than you’re playing the game itself, or even your own game.  You act based on your opponent’s actions, and it’s his or her actions that determine how you act as a result.

Last month, I was working with a buyer in a really tough price point, and we determined that we would have to get creative in order to secure a property.

There were two properties that we liked, but one was listed by a well-known, established agent working for a brand-name firm, and the other, to be perfectly blunt, was listed by a nobody.

We figured that if these two properties made it to “offer night,” we would end up losing.  Our budget was such that the market would beat us, just about every time.

I suggested to my client that we submit a pre-emptive offer on the property listed by the “nobody,” since I honestly didn’t think that he would proceed as other agents would.  The price and terms we would attempt with this agent would be laughed at by the established, well-known agent who had listed the other property, which demonstrates how we “play the player, not the game.”

We drafted an offer for about $25,000 less than my client would have been able to bid on offer night, which, as I said above, would have almost certainly lost.

My buyer went to the bank to get a deposit cheque, and we submitted the offer at 1:30pm on a Sunday with a 5:00pm irrevocable.

That window is not what I would ordinarily provide with a bully offer, mind you.

You typically want your window to be long enough that the listing agent doesn’t immediately throw the offer back in your face, but short enough that the whole buyer pool doesn’t have time to mobilize and compete against you.

I spoke to the agent and sold her as best as I could.  I told her that I sympathized with her sellers, and that it must suck to have to be out of the house every night with a small child, plus, have to be out next weekend for the open house as well.  This agent, for some reason, had an offer night that was sixteen days after the property was listed!  It was absurd!  So there were two weekends through the listing period, and her clients must have been exhausted already.

The agent didn’t balk at the short irrevocable, and I sent him a photo of the cheque, telling him that I would come by and drop it off that night.

But the big reason why I wanted to submit a pre-emptive offer on this property?  I just knew this agent wouldn’t call all the other agents who had shown the property.  Call it a hunch, or an educated guess based on experience, but with a 3 1/2 hour irrevocable, most agents would immediately say, “I can’t get in touch with all the other agents in this time period,” but this agent didn’t even mention it.

This was a discount agent, to be frank.  This agent was potentially a part-timer, and definitely wasn’t getting paid a whole lot.

I had a sneaking suspicion that this agent wouldn’t do her job, or, at least – the job she should be doing.

And I was right.

Our offer was accepted at 3:45pm, meaning the agent didn’t wait until 5pm, because there was nothing to wait for!

You typically accept a bully offer, with a 5:00pm irrevocable, at 4:59pm.  You do this because you want to wait and see what else comes in before the deadline.  In this case, there was no waiting.  There was no “else” because the agent didn’t call all the other agents who had shown the property.  I know this for a fact because one of those agents called me the next morning to ask about the particulars of our offer, and how the process was handled, saying that he never received an email, page, or phone call about the bully offer.

We played the player, not the game.  We identified a shoddy, discount agent who we knew wouldn’t do her job, and we took advantage.

Why do sellers hire these people, seriously?  Ah, topic for another day…

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Killing Them With Kindness

Ready for a story that’s the complete opposite of the one above?

A property was listed last week that was perfect for my young buyers, and having seen a ton of product out there and not feeling “love” for any of them, I knew this was the one.

It was listed by a well-known, brand-name agent and her colleague, both of whom I know well, and have transacted with many times before.

I told my buyers that they needed to see the property that night, and they were in and out before 8pm.

They loved it, as I knew they would.  Moderately over-budget if it sold for what we thought it might, but well worth it, and somewhat “future proof” because there’s room to expand, and lots of money to be had through improvements.

We set a plan in place.  We would submit a bully offer at 10:30am the next day, with a 5:00pm irrevocable.

This is enough time to satisfy the listing agent, enough time for the seller to get word of the offer, mull it over, talk to her inner circle, and decide on what to do, and yet it was not enough time to allow other buyers to see the property that night after work, and still compete.

We figured that there were probably six or seven showings the first night, when we went, and therefore maybe one or two of those buyers would submit competing offers against us.

Our offer went in around 10:30am, with a photo of a bank draft, the seller’s desired closing, and a price that we felt was just above or below what the seller might ahve had in her head.  We figured, of course, that this was well below the offer-night “ceiling,” so it was all upside for us!

The wait is long, as a buyer, when you make a bully offer.

10:30am to 12:00pm might go by quickly, as you burn through your morning at work and then head to lunch.  But from 1:00pm to 5:00pm it seems like an eternity.

The agent first contated me at around 10:45am to say, “Received, thanks!  Will check with my seller.”  That’s always a good first step, since it means the agent doesn’t dismiss it outright.

I emailed the listing agent to ask, “Is this enough time for you?”  Not that I would change our offer, but I wanted to be as kind and thoughtful as possible.

I followed up and said, “I have the cheque, I can bring to your office this evening.  I know you’ll want to update MLS asap so other agents don’t hound you!”  Again, it’s all about playing nice when you know the agent.

Just after 12:00pm, the agent called me and said, “I’m going to meet my buyer around 4:00pm,” which means that we had succeeded in getting them to move up their offer date.  The agent didn’t explicitly say so, but once the page went out to buyer agents, “Offer Registered On XXX 123 Smith Street, Presening Today At 4:00pm,” I knew that we had succeeded for sure.

At 4:00pm, the listing agent called me to say that they had received a competing offer, but never asked me if this was our “final price.”  I took that to mean that we were ahead.

And by 4:45pm, I got the phone call, “Congratulations, we’re accepting your offer!”

I’ve worked on successful bully offers with this agent in the past, and I think that helped.  There’s a level of trust present.

Every bully offer situation is different, and I think the first two stories today show that.

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Rookie Mistake

Once upon a time, when you submitted a bully offer, you had to provide a reason why the seller should accept your offer now, ie. why your buyers wouldn’t be available on offer night.

Oh, the stories!

Who knew people took so many vacations in the Australian outback where there’s no cell reception, right?

Over time, these stories became so expected that most buyer agents stopped using them.  Now, we simply get to the point: “I’m submitting a pre-emptive offer on behalf of my buyers.”  No pretend-trip planned over offer night, just an offer that’s coming today, so deal with it.

Last month, a condo listing came out and there was a familial connection between the listing agent and the seller.  The listing agent was also from outside the GTA, and also seemed to be a beginner.

I got my client in there on her lunch break!  And by 3:00pm, we had a bully offer in on the property, complete with a deposit cheque.

I called the agent and said, “My buyer isn’t in the country next week, and she can’t come back with this offer.  You get one chance to sell for this monster price, and it’s now.  It’s tonight.”

I berated him with reasons why he would never see this price on offer night, and taking a line from the character assumed to be Tobey Maguire in the movie Molly’s Game, I told him, “I swear on my grandmother you won’t get this price on offer night.”

Last I checked, both my grandmothers are still dead…

He took our offer, and one week later a ground-level unit, slightly larger, but no view, and adjacent to the street, sold for $55,000 more.

Does this make me an asshole, or am I just working for my clients?

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Losing In The Worst Possible Way

A friend of mine was drawn into a bully offer situation on Saturday night.

He wasn’t the bully, but rather he had planned to submit an offer on this downtown Toronto condo next Tuesday when offers were set to be reviewed, but low-and-behold, somebody submitted a pre-emptive offer on Saturday night.

The condo, listed at $899,900, had $990,000 written all over it.  This is what I told my own client who was interested in the property (who isn’t ready to buy, but was looking for educational purposes), and this is what I told my friend as well.

There ended up being five offers on the condo; the bully and four others.

My friend offered $975,000, and I said, “Why would you do that?  It’s just enough to lose.”

The buyers said in advance, “We do not want this place for $990,000.  We’d be fine losing it at that number.”

Two offers were “sent back,” including my friend’s.  He thought he was in the lead and bidding against himself, and I told him, “$990,000 takes this, you could have had it at this price from the start!”

The buyers wanted to go up to $981,000, and I told him this number was going to lose.

This is all based on gut-feeling, of course.  There’s no way of knowing.  But if you do this long enough, you get very good at making educated guesses.

The buyers reiterated that they didn’t want the condo for $990,000, and I suggested to my friend that they bid $985,000 then.

They stuck with $981,000.

Guess what the other bid was?

$982,000.

Sickening, right?

That’s a bad, bad beat.

It hurts so much when it happens, and it’s happened to me many times.

Then once hindsight sets in, oh, wow.  That’s a tough night.  It literally haunts you in your dreams.  Ask any busy real estate agent and they’ll tell you just how many dreams they have every night about their existing clients, and how real those dreams seem.

For the buyer, it’s back to the drawing board…

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I also made a bully offer on the Family Day holiday, which was accepted, and not competed against, since presumably everybody else was with their family.  But that’s essentially the story, so I won’t belabour it.

If you’re a buyer in this crazy 2020 market, use the bully offer to your advantage.

It works.  Trust me.