…that is the question!

The answer depends on whether you are a buyer or a seller, and whether you are a risk-taker or not!

Bully offers are happening with increasing frequency.  Let’s examine why…

We’re only into March, but already I’ve had every experience there is to have, regarding bully offers.

I’ve had it with a buyer and with a seller, and I’ve been both successful and unsuccessful.

I’ve had a buyer come back on offer night, and a buyer change his mind.

I’ve had a seller look at the offer, and I’ve had a seller say “No thanks, I’ll wait.”

And I’m certain that all this is happening for a reason…

What is a bully offer, by definition?

A “bully offer” is submitted on a property before the scheduled offer night.  If a listing comes out on March 7th and the notes detail, “All offers to be reviewed on March 18th at 7:00PM,” you don’t have to wait until then to submit an offer.

You can submit an offer any time you like!  Anybody can dial a fax number, right?

But whether or not the seller looks at the offer, is another story.

Last weekend, I was showing Jordan and his parents a condo in the west end.  Jordan and I had made an offer the week before on a similar property, but we lost in multiple offers.

This property was priced at $409,000, and as a point of personal interest, I’ll tell you that it was owned by the former lead singer of a pretty cool Canadian band from the late 1990’s and early 2000’s.  In fact, I listened to ten of their songs as I typed up Jordan’s bully offer…

While in the condo, I suggested, “Let’s bully this bad boy, what say ye, Jordan?”  His mother asked, “What’s a bully offer?  I mean, I’m a teacher, so I know what a bully is, but what’s a bully offer?”

I told her that instead of waiting until the scheduled offer date the following Tuesday, we could offer, say, $425,000 today and jump the queue.

“That sounds great,” said Jordan’s mother.  “Let’s do that!  What are we waiting for?”

It’s a darned good question!

Why isn’t everybody doing this?

If you’re a buyer, and you’re fed up with “losing” in multiple offers, why not just say “eff it” and work with bully offers from now on?

Jordan signed the bully offer on Saturday night, and we submitted it via email at about 11:00PM with an irrevocable of Sunday morning at 1:00PM.  There was an open house scheduled that day for 2PM, so we wanted to force them to make a decision.

It worked.

Jordan got the property for $425,000, and he told me that he probably would have gone higher if he had to on offer night.

So why did the seller accept our offer?  Why didn’t he wait until Tuesday?

Well, how can you turn down $425,000 for your property when it’s listed at $409,000?  There’s no guarantee that Jordan would be back at the table on Tuesday!  That’s the risk-reward equation for the seller, and he took the money and ran.

A few weeks ago, I submitted another bully offer for a young couple who were looking to buy along The Danforth.

The house was severely under-priced at $599,000, and we knew all along that this was easily a $750,000 house.  A similar property had sold for $750,000 two weeks earlier, and it was smaller but in a better location.  At $599,000, the under-pricing was extreme…

We submitted a bully offer of $725,000 for the property, at my suggestion, since I knew they would pay more on offer night.

I wanted to use this bully offer to accomplish two things:
1.  Try and get the property for slightly less than my clients were willing to pay (just like Jordan, except he was successful).
2.  Feel out the seller and the agent regarding price.

By submitting the bully offer, we were essentially getting two kicks at the can!  If they accepted our offer, great!  If not, we could try again on offer night, and we’d have some inside information going in.

As luck would have it, the agent emailed me back and said, “Wow, this is the third bully offer we’ve received this week!  Imagine that!  Anyways, my sellers have declined your offer at this time.  Hope to see you this Wednesday!”

Hey, it was worth a shot, right?

By submitting this offer, we found out that there were already TWO other bully offer attempts, and thus TWO very, very serious buyers that would be competing against us on offer night.

We also found out that we’d have to be well above our $725,000 bully offer price.

We got the house the following Wednesday, but that’s a story for another day…

I currently have a property listed in the St. Lawrence Market area for $269,000, and in two days I’ve had twenty-two showings.  So it came as no surprise that I received a bully offer tonight!

There is a time and a place for a bully offer, both as a buyer and a seller.

I did not deem this to be the case for my seller.

With twenty-two showings in two days, and with another seven full days until our scheduled offer night (with a public open house this weekend), there is so much upside in waiting!  I have certain expectations for what this property would fetch on offer night (which I can’t disclose on here, sorry!), so unless this bully offer was substantially over that price, I’d advise my seller to wait.

This is a very rare condominium with parking and locker for $269,000.  I’m not surprised at all by the overwhelming interest!

I’d like to wait until offer night so that the two, three, or seventeen buyers will feel the pressure that results in them paying the maximum amount possible for this condo.  I am working for my seller after all, right?

As for my buyers, I’m going to push them to submit bully offers more often.

You have nothing to lose, and everything to gain.

Unless you’re one of those people that thinks, “Maybe there won’t be ANY offers on the scheduled offer night, and we’ll get a steal!”

I haven’t seen a steal in quite some time…