So, you’ve decided to put your home on the market. You’ve cleaned, decluttered, and maybe even done some minor renovations to make it look its best. And then, you get a call from your real estate agent telling you that you’ve received a “bully offer.”
What in the world is a bully offer, you may ask? Don’t worry, we’ve got you covered. In this article, we’re going to explain everything you need to know about this phenomenon in the real estate market.
So what is a bully offer?
A bully offer is an offer made by a potential buyer to purchase a property before the scheduled offer presentation date, which is typically set a few days or a week after the property hits the market. Essentially, the buyer is trying to “bully” the seller into accepting their offer before anyone else has the chance to make an offer.
This can also be known as a "pre-emptive offer"
Are bully offers legal?
Pre-emptive or "bully" offers are legal and have become more frequent in hot sellers' markets where multiple buyers express interest in the same property. If the seller does not specify to hold offers until a certain date, the seller's agent must convey the offer as soon as possible.
However, in a seller's market, some sellers may ask their agents to hold all offers until a specific date and time to maximize exposure and attract competing offers. Despite this, some buyers may submit a "take-it-or-leave-it offer," commonly known as a bully offer, before the specified date and time.
The purpose of a bully offer is to present a strong offer early to entice the seller to abandon the scheduled date and time to review competing bids. The contents of bully offers vary from property to property, with some offering more than the asking price and others waiving conditions like home inspections and financing.
Under specific market conditions, bully offers are common, and listing agents must present these offers to their clients unless the seller has given written instructions to do otherwise. If the seller changes their instructions to start seeing offers, the listing agent must adjust the presentation timeline in the listing notes and inform all interested parties who have booked a showing or submitted an offer.
So, what should you do if you receive a bully offer?
As the seller, you have a few options. You can choose to accept the offer, decline it, or wait until the scheduled offer presentation date to see if you receive any other offers. If you do choose to accept the bully offer, the other potential buyers who were planning to make an offer will not have the opportunity to do so.
It’s important to note that in some cases, a bully offer may come with a condition that the buyer needs to have an inspection or secure financing by a certain date. As the seller, you should carefully review the terms of the offer and make sure that you’re comfortable with them before making a decision.
On the other hand, if you choose to wait until the scheduled offer presentation date, you may receive more offers from other potential buyers. However, there’s no guarantee that these offers will be better than the bully offer, so it’s important to weigh your options carefully.
It’s also worth noting that in some cases, a real estate agent may advise a buyer to make a bully offer in order to secure the property. As the seller, you should be aware that this may happen and be prepared to handle it if it does.
A bully offer can be a tricky situation for a seller to navigate, but it’s important to remember that you have the final say in whether or not to accept the offer. If you receive a bully offer, take the time to review the terms carefully and consider your options before making a decision. And if you’re a buyer thinking about making a bully offer, make sure you understand the potential risks and benefits before taking the plunge. With a little bit of knowledge and preparation, you’ll be able to navigate the real estate market with confidence.