If you have been shopping for Nanaimo real estate in this competitive seller’s market, you have probably heard the term ‘Bully Offer.”
A bully offer, also known as a pre-emptive offer, is an offer that is submitted to the seller prior to the scheduled date to review offers. The word Bully is used because it is a tactic used by a buyer and their agent to elbow their way in, prior to a selected date and time, which has been set to review offers.
Bully offers can seem unfair; however the tactic can be successful in helping you secure a home.
Why would a seller accept a bully offer?
The advantage to the seller in accepting a bully offer is that they can stop showing their home, which can be very inconvenient. If the offer is a reasonable offer price with few, if any, terms attached to it then the seller is free to accept it and move forward with their plans.
Some sellers will hold out for the set date to review offers in hopes that they get a higher price with the best terms. However, even though many homes do receive multiple offers in this heated seller’s market, its no guarantee.
A seller might look at the bully offer and think that it is a fairly good offer and maybe we should accept it so we can move on. There is also the possibility that the bully offer is higher than they could expect to receive in a multiple offer scenario.
Every seller’s situation and personality are different, that is why it sometimes pays off to write a bully offer. You do not know what is motivating the seller and your bully offer tactic may just work out.
When is a good time to submit a bully offer?
As a buyer, you will never know the full circumstances on why a seller is selling their home. Sometimes, a seller will be highly motivated to sell and if the bully offer is sweet enough, they may just jump on it and accept it.
Many buyers, in the market these days, have written numerous, unsuccessful, multiple offers. They are frustrated and discouraged. As a result we are seeing many more bully offers submitted.
Some sellers have indicated they are firm about waiting to review offers on the set date and will not look at offers prior to that date. Many, however, are setting the date to review offers but are advising their Realtors that they want to be advised of any pre-emptive offers. In this case many buyers are proceeding to write bully offers.
Even with a bully offer, buyers are often still going up against multiple competing pre-emptive offers.
If you are considering becoming a little more aggressive in your bid to buy a home, it is important to be ready. If possible, get in the first day the house is listed, do your due diligence immediately and make sure your pre-approval is solid and that your lender is aware of what you intend to do. You are going to have to act quickly.
The BC Financial Services Authority offers this advice to Buyer’s considering writing a bully offer: “Buyers considering submitting a pre-emptive offer should keep in mind that attempts to subvert the seller’s stated offer process may make the seller less likely to consider their offer. As well, buyers who submit pre-emptive offers may feel the need to offer a higher purchase price than they otherwise would to convince a seller to entertain their offer before a presentation date, even though no other buyer may even submit an offer by the presentation date set by the seller.”
This is sound advice. In this overheated sellers market Buyer’s are feeling stressed. There is nothing easy about buying a home these days.
We would be happy to meet with you to discuss the best approach to getting into the housing market. Please give us a call.