How to Handle a Bully from the desk of Rod O'Keefe
How to Handle a Bully from the desk of Rod O'Keefe
The real estate market continues to be WHITE HOT in the North Okanagan and Vernon. Low inventory combined with too many buyers ensures the real estate bullies are out in full force, bringing bully offers to desirable properties.
This past year the O’Keefe 3% Real Estate office has had several Bully Offers. There are 2 kinds of bullying offers, let’s look at both.
- The first kind is always negatively received.
- The other can be good for both parties.
But let’s not get ahead of ourselves – what is a Bully Offer?
A bully offer is a pre-emptive offer that does not follow the offer guidelines of time and date set by the seller. Generally, the offer forces the seller to provide a response within a very limited time. It forces sellers to rush their decision.
In this market, it is a sellers’ right to invoke restrictions on the showing schedule, as well as how and when they would like to receive, and review offers. This is especially true in this extraordinarily strong seller’s market. Our sellers want as many people to view the home as possible in a specific period, so everyone has a fair chance to write an offer.
Bully offers tend to circumvent this process set out by sellers, usually to beat out other buyers. Bully offers are still considered legal by our Board Rules and Regulations but can offer significant challenges to all parties. Therefore, we have strategies to address the scenario.
Our clients can have restricted schedules and we promote that they ask all offers are left open for consideration for 24 hours. This will provide them the time to think about and discuss with family or others (accountants/ lawyers) about the offer. As well, the request for 24-hours to respond allows everyone who is already scheduled to view the Okanagan Home to have a fair chance to view and write an offer if they choose. As the sellers’ representative (listing agent), we post and supply these written instructions and restrictions to the buyers’ agents. Most agents and their buyers generally try to abide by the Seller’s guidelines.
Sometimes though, buyers feel entitled to circumvent the instructions (which they have every right to) and write a bully offer. This is usually done out of desperation as they have found their dream home and do not want to compete with others to buy it.
Although bully offers are frowned upon in the industry, it is understandable that some buyers will want to submit such offers in this highly competitive market. There are factors that make a bully offer well received or VERY negatively received by the Sellers.
Here are a couple of examples that contrast a negative bully offer to the more desirable bully offer.
In both examples, a bully offer is submitted on a Friday evening. In each example, both our clients had instructions posted that all offers be open 24 hours so that other, already scheduled showings for the following day would still have a chance to view the home and submit an offer if they choose.
- EXAMPLE #1 The “bad” bully offer was received at 7:30 pm on Friday and it was only open until 9 pm the same night. I, as the listing agent, had to drop everything and find my client (by duty we still must present the offer, even if it breaks the sellers’ guidelines for offers) and meet to present the offer. The presentation of the “bad” bully offer was not a positive experience, as it was an offer below list price with a slew of buyer conditions including financing and inspection. Our client was annoyed and saw right through the bully tactics. They decided not to respond and wait for the buyers scheduled for the next day showings. In the end, it was worth the wait as another Buyer submitted a higher than list price, unconditional offer the next day. This meant my client had sold their home immediately (they did not have to wait for banks or inspections) and they received a record price in the development they lived in. Sometimes it is good to stand up to bullies. 😊
- EXAMPLE #2 The second example is of a “good” bully offer that was submitted earlier than Seller’s instructions, on a Friday evening but on a different home. First, the agent called in advance to say they had a bully offer that the Sellers really might like. Similar to the first example, this offer was submitted with only about 2 hours to present to our client and for the client to decide. Again, there were other buyers coming to view the home the next morning. But this was an extremely good Bully offer - it was $50,000 above the list price with no conditions (meaning the home is sold as soon as our clients signed the paperwork, no banks/no inspection). Now, it was just up to our client to decide if a next-day viewing could produce a better offer than what they had just received. Even though the Seller was put under pressure by this “good” bully offer to make a decision, the seller accepted this Bully Offer because it was an offer that they were very happy with and both parties came out successful in this situation. 😊
Whether a good or bad bully offer, our official position is to recommend rejecting all bully offers, even the good ones. Our experience has shown the good bully offer buyers come back the next day to offer even better offers.
In summary, this highly competitive market might bring a Real Estate Bully to your doorstep. If you are going to be bullied, learn how to identify, and manage all types of real estate bully offers and have the right agent in your corner to navigate all scenarios.
