In today’s ultra sensitive society, I had better give a warning… I’m not promoting bullying. Okay, now that we got that out of the way, here’s why a bully offer can make sense for you when it comes to purchasing a home.
What is a Bully Offer?
A bully offer is when a buyer puts in an offer on a property even though the realtor and seller has said they will not accept offers until a certain date.
Pro Tip on Bully Offers
You can put an offer in at any time. All realtors must present your offer to the seller no matter what. Good to know.
Why would you do this though? Well, for one to avoid competition. Another reason is to get ahead of the pack. You are taking away the seller’s leverage and you are giving yourself a head start.
Example of a Bully Offer
Here’s a true story and great example of how this could work to your benefit.
Two executive townhouses for sale in a prestigious location where properties rarely come up for sale within a few days of each other. Property ‘A’ is in original condition and will need some renovations and is listed at $620k. They are accepting offers in 1 week.
Now, property ‘B’ has been renovated and shows much nicer. They are getting a lot of activity and will surely sell for above asking price. They’ve listed for $649k and are also accepting offers in five days.
The buyer likes property ‘B’. On Sunday, the buyer submitted an offer at $700k with no conditions and gave the seller just 15 hours to accept or decline. The buyer had 35% down payment available, and was pre-approved for a mortgage.
The End Result?
The seller accepted the offer for $700k.
A few days later, Property ‘A’ also sold for $680k but this was for far more than it should have sold for given the superior condition of Property’B’.
In hindsight, had the owner Property ‘B’ held off and went through the bidding war, they most likely would have obtained a higher selling price. I estimate it would be at around $720k and possibly even $750k.
My Bottom Line
This is a tactic for those with confidence in their financing and who are able to follow through with the purchase. Sometimes being a bully is okay.
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
Steve Garganis: 416-224-0114; firstname.lastname@example.org
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.