It’s foreseeable that, in Toronto’s hyper-heated market, bidding wars are essentially part of the home-buying process. But what about the newest phenomenon: bully offers?
Bully offers are gaining prevalence as buyers attempt to circumvent the exhausting bidding wars and jump straight to their top price for a property. In all of my 16 years in real estate, I have never seen so many bully offers.
In desirable neighbourhoods, the offers, if any, are typically scheduled to be reviewed a week after the house hits the market. It is done to allow as many people as possible to look through the home with the purpose of finding an ideal Buyer.
But what if that ideal Buyer shows up the day the listing hits the market and wants to buy it? What if the Buyer doesn’t want to wait a week to submit his offer, and most likely end up competing, and worst still, losing that house?
He can do what is called a pre-emptive offer or as we often call them “bully offers”. This is when a Buyer jumps the line and submits his offer for consideration before the offer date. This basically short-circuits the whole system.
The problem isn’t so widespread in the outlying areas of the GTA or in Toronto’s condo market. But for the single-family homes, which are difficult to come by in the first place, bully bids are becoming more and more common and this drives property prices up higher and faster than ever before.
As a listing agent, you can request ‘no’ to any pre-emptive offers on the MLS listing itself, but you can’t stop someone from submitting one and you can’t stop your Sellers from looking at it. Essentially, the Sellers have the final say so it is wise to be informed and prepared for any probable bully bids regardless if you’re the Buyer or the Seller.
My prediction for the fall market in Toronto is it will continue to go up, prices will increase across the board primarily due to the fact that there is an absence of available homes and interest rates remain at all-time lows.
Have questions about bully bids? Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662
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