It is vital to keep yourself up to date in today’s fast-paced real estate market. We see more and more listings generating numerous bids and bid wars by only setting a date when the seller can check all bids. It is in this setting that bully offers emerge.
Conditions like “bully offers” are essential for understanding whether you want to buy or sell a house. This article will discuss more on bully offers – what they are and how they function.
What Is a Bully Offer?
Bully offers, pre-emptive offers, are made when a buyer provides a bid, usually well above the requested amount, before the seller considers it. The aim is to leap over other purchasers by persuading the seller to immediately overcome the standard procedure and secure the offer.
Bully offers indicate hot market predictors, so it is no wonder they are becoming increasingly popular. They were a host of individuals on the pandemic market, but now we see them more frequently with condos as the GTA condo market is warming up. And these days, we have also begun to see them with rentals, particularly for more extensive or unique buildings.
How Do Bully Offers Work?
A bully offer will go above your head if you don’t work in the real estate industry. That is fair, but suppose you want to be educated and get a lot of money, you will want to stay informed. A bully offer is simply an offer from the buyer of the home to a seller to buy a home listed for sale before a seller has claimed to be accepting offers.
For instance, suppose you listed your home for sale on Wednesday; you may want your listing to run over the weekend and begin accepting offers the following week on Monday. A bully offer can come anytime between the date you listed your home and your official day of accepting orders.
This decision to “hold offers” before a certain date is a brilliant strategy. It helps most buyers to see the home and raises the likelihood of sellers having a bidding war and even pushing up the sale price. When a bully offer is made, you can choose to accept it, negotiate or stick to your original strategy and see what happens as more offers begin to flow.
Bully Offer Strategies for The Home Buyers: How to Make It Count
If you are falling in love with a home and you don’t want to get into the real bidding war on the official offer date, here is how bully offers can work for you:
Do not show your cards in advance
Bully offers are most effective if the seller is taken by surprise. The rules on the property require the listing agent to inform prospective buyers, while they can wait and request a bid for the “offer day” period, that a pre-emptive offer has been made.
Be sure to strike early
You won’t get anything if you make a bully offer the night before the offer date. You should make the bully offer several days or hours after the property is listed for sale before the home sellers start feeling too much confident.
Make your bid unconditional
That means that you have ensured your funding is in order and you are happy with a home inspection before making the offer. The aim is to comfort the seller that you can’t (and won’t) change your mind.
Give a price that will tempt you to take your offer vs. wait for a bidding day
Bully offers won’t be good unless they really WOW the seller. It is not uncommon to see bully deals that are $100K+ more than the price required. The trick is to convince the seller that this price will not be offered at offer day.
Let the seller aware of the closing date
Including any inclusions/exclusions. Basically, you want to appear as the most pleasant buyer ever. Now is not the time to ask them to put their television on the big screen.
Give the seller the shortest time possible to consider it or leave it
The strategy won’t work suppose you give the seller if you give a bully offer and give days to drum up the competing offers,
Don’t get cocky
Suppose your offer isn’t that great, you might be motivating other stunning offers to compete with you, and you will lose the house. Suppose you don’t go big, it might be best to wait until he offers night and hope that the competition isn’t that big.
Work with agents who have experience with bully offers
This is an advanced negotiating tactic and needs your agent to have a robust relationship with an agent who represents the seller.