If you’re a homeowner in the Greater Toronto Area, you may assume that there’s never been a better time to sell. While the demand for housing is still steadily outpacing supply, buyers are becoming more aggressive in recent years in order to undercut final selling prices. This has led to a rise in bully offers within real estate. If you plan on selling soon, understanding common strategies used by buyers before you list your home can help you be prepared in case you face any.
Here’s everything sellers need to know about bully offers.
Not sure if you need to make upgrades to your home before selling? Explore our blog post on pre-listing renovations here.
What Are Bully Offers?
Typically, when a house is listed on the market, the listing agent sets a date for when potential buyers may begin submitting offers to the seller. Known as the Offer Presentation Date, this is a fairly common practice in real estate and can support sellers when they are anticipating multiple offers. Setting a designated date allows sellers to receive and consider multiple offers on their terms. It can also set the stage for a bidding war, resulting in a successful sale for the homeowner.
A bully offer occurs when an interested buyer has their agent submit an offer to the seller before the designated date. In theory, this gives buyers the upper hand as it pressures sellers into accepting an early offer without hearing or considering other bids. Many agents have argued that this creates an unfair power dynamic. However, bully offers remain a prominent reality in real estate.
Looking for more information about bully offers and other market strategies? Explore these great resources.
New Dynamics
It’s no secret that Toronto’s housing market is red hot. In recent years, record prices and frequent bidding wars have made headlines locally and across the country. As a homeowner, you likely considered these trends as you began thinking about selling your home. Inversely, buyers are also taking these factors into consideration.
In a hot market such as Toronto, buyers are forced to be both strategic and aggressive in order to find a great home. This influx of desperate buyers has made bully offers increasingly prominent in the current real estate market. As a result, more sellers find themselves facing the stress and anxiety that bully offers are designed to instill.
It’s important to recognize that not all buyers are comfortable making this kind of move. So even if a potential buyer expresses early interest, it doesn’t mean they’ll submit a bully offer. That being said, there are many other techniques buyers can utilize to impact their chances of success and sellers should be ready for anything.
Preparing to buy your next home? Check out these resources from our blog.
- 5 Unexpected Changes When Moving From a Condo to a Home
- What to Know About Buying a Home
- How to Interview a Real Estate Agent
What About the Recently Announced Government Regulations?
In April of 2022, the federal government announced a handful of initiatives designed to solve ongoing challenges within Canada’s housing market. Amongst these initiatives is a plan to develop and implement a Home Buyer’s Bill of Rights (HBBR). As the title suggests, this bill will introduce new advantages for buyers, but will it impact bully offers?
Within the government’s outline for the HBBR, is a ban on blind bidding. Currently, a seller who is receiving multiple bids from potential buyers is not required to disclose the bids to other interested parties. This allows sellers to receive stronger offers sooner. While there is currently no formal timeline for when these regulations will become enforceable, it is on the horizon. Homeowners who are thinking of selling in the near future should take this into consideration when deciding when to list.
Want to learn more about the recent federal budget and housing actions announcement? Explore our blog post on the topic here.
What Should Sellers Do if They Receive a Bully Offer?
While bully offers are designed to make sellers feel pressured, being prepared and having a practical mindsight can help you make the right decision when the time comes. A great real estate agent can help you navigate a bully offer with strong advice and reassurance.
As an expert in the housing market, they will be extremely familiar with bully offers and know which red flags to look out for. Although they put sellers on the spot, not all bully offers are bad. You’ll be able to discuss any bully offers with your agent, and they can let you know when accepting an offer may be the best move.
Ready to start your home selling journey? Contact us today and learn how our team can help make it a success!
