Although the term “bully offer” comes up a lot in the world of real estate, we’ve come to realize many sellers still aren’t entirely sure what it means. Bully offers are a type of bid made by very eager buyers, and without the proper management, can cause quite a lot of uncertainty among sellers.
The truth is, bully offers can also create some anxiety among those who are selling their homes — but they can also appear as a blessing for some sellers in the way of a higher sale price (in some cases). The tricky thing is, if you receive a bully offer as a seller, determining which way you interpret the advantages (or disadvantages) of it comes down to your understanding of what your options are and how well you can weigh them in your favour.
So, if you plan on selling your home in the near future and you’re curious to know more about what to do if you receive a bully offer from an eager buyer, let this serve as your guide to help you learn everything you need to know about what they are and how to navigate them.
What Is A Bully Offer?
Bully offer definition: As a seller, when you list your home on the market, you might decide to set an offer date. This is the earliest chosen date when you will look at your bids, which means you actively won’t start considering any offers that come in before that set date. The major benefit of this strategy is that it allows you to lay out all of your offers in front of you and compare them all at once.
All too often, sellers feel pressure to accept a good bid right away. They worry that an acceptable bid from a buyer might expire or be revoked if they don’t accept it right away, so they feel pressured to accept it rather than let it slip through their fingers while waiting for other offers to come in. Setting an offer date allows sellers to compare all of their options at the same time, which takes away all of that stress.
However, there’s a way for the most eager of buyers to get around a sellers’ offer date tactic — by submitting a bully offer (also known as a pre-emptive bid). A bully offer is a bid that comes in before the offer date you as the seller have set.
Most typically, the buyer will include a date by which their bully offer needs to be accepted — and it will be earlier than the offer date you’ve chosen. The logic, of course, is that you may feel compelled to take the offer before you have a chance to look at any others.
Risks And Rewards
Generally speaking, sellers don’t like bully offers — it goes against the entire reason why they set an offer date in the first place. The good news is, this type of bid can actually work in your favour, depending on the circumstances.
On the one hand, if the buyer bothered to make a bully offer, it’s probably going to be pretty impressive. There are exceptions to this rule (which makes those bids pretty easy to reject), but a pre-emptive bid will generally include a financial offer significantly higher than your original asking price in order to motivate you to accept it before reviewing any competing bids. When this is the case, you may decide that you’re unlikely to receive bids of as much or more on offer day, accept the bully, and be done with your sale without needing to wait and longer.
Of course, there’s a flip side here. Accepting a bully offer means you’ll never actually know just how much you could’ve got from other potential buyers if you’d waited for their bids to come in. This is why some sellers view bully offers as a lose-lose scenario. No matter if you decide to accept a bully offer or not, you may be left feeling regretful you missed out on a better bid.
Fortunately, having a pre-emptive bid on your home actually puts you in a very good position, though it may not feel that way when you’re tasked with making the final decision. In actuality, receiving a bully offer means you have more options — and there are steps you can take to help ensure that your final decision is an informed one.
If you receive a lucrative bully offer, there’s a good chance it’ll come with some specific terms and conditions too. Learn about what to watch out for when reviewing conditional offers from buyers by reading our guide, Conditional Offers: 4 Things To Know.
How To Make An Informed Decision
There are no two ways about it — if you find yourself on the receiving end of a bully offer for your home listing, knowing how to handle the situation and choose the option that will result in the best outcome for you is difficult. However, there are things you can do to ensure you put yourself in the best possible position to approach the situation and make an informed decision on how to handle your bully offer.
First, it’s vital you seek the advice and expertise of a real estate professional with comprehensive experience dealing with bully offer situations in the past. They can help ensure you consider all of the most relevant pros and cons of the scenario while taking inventory of what their most likely long-term outcomes would be.
Additionally, they’ll be able to leverage their market research and expertise to help you forecast what the likelihood of you receiving a comparable or even more enticing bid later on would be if you decide to wait for your offer day. If the most up-to-date market data and statistics show that the probability of you receiving an equal or better bid from a buyer on offer day is high, then it’s most likely in your favour to wait until then.
Lastly, a seasoned Realtor® can also help you with their negotiation expertise in the event of a bully offer. If they believe that you might be able to submit a counteroffer to the eager buyer, which in turn could result in an improved sales price, then they might advise you to do so as well. Whichever pathway you choose to explore, having the trusted advice of an experienced and skillful Realtor® by your side will inevitably help you make the right decisions throughout the process.
With the guidance and expertise of a qualified Realtor® on your side, maneuvering through any type of sale becomes substantially easier. Learn more about how we help our selling clients earn the highest returns from their home sales, then find out what you can expect to earn for your home via the links below.
The Bottom Line
When it comes to pre-emptive bids, the key to avoiding regret is by assessing your personal circumstances and the current state of your local market — and your real estate agent can help you with both. They’ll compare your home’s accurate estimated market value along with the market’s current conditions to help you understand your position (and the likelihood that you’ll get better offers if you wait).
While none of us can know what the future holds, it’s possible to make a smart decision based on the information you have — and your comfort level, of course. Finding an experienced local agent who’s well-equipped to advise you is the first step to successfully navigating through a bully offer situation.
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