In this series, I’ll be discussing the different elements of having Multiple Offers, like setting a price, setting an offer date, offer presentations and a Bully Offer.
What’s a Bully Offer? No, it’s not the offer that beats up all the other offers in the playground. Though it’s quite similar to a bully that cuts in line of other people.
Let’s first discus the two ways Sellers receive offers. In the traditional way of selling a home the sellers list their home on MLS and accept offers anytime.
However, in the past couple of years we have been in a pretty hot market so Sellers have started hold off on offers. In this new way of selling a home, a Seller would give a couple of days to a little over a week to gather interest in the property. On the offer presentation date, the Seller would review all the offers at once. This is the method that creates the bidding war and bidding mentality. People just want what other people want too. With this method you have to price the property a bit lower or perceived to be a bit lower than market value. There’s a lot of strategies in holding an offer presentation and I will cover that in future blog posts in the Multiple Offers Series.
Today I’ll be discussing Bully Offers. Is it good? Is it bad? Should you take it?
It depends… Let’s use two of my past experiences to show you the different outcomes.
In case #1, Mr. and Mrs. Johnson was downsizing and selling their home with me. Everyone in the neighbourhood was selling over asking by having an offer date. The market value based on neighbourhood sales ranged from $690,000 to $710,000 and we listed it for $649,000 giving a week until we received offers. 4 days later on Monday, we received a call and an offer, a Bully Offer! They offered $720,000 with conditions. This was a good offer and the sellers didn’t want to lose it but at the same time wanted to see if there were other offers. So I called up everyone that showed it and basically said, if you have an offer present it tonight. At the end of the day, the Bully Offer worked and my sellers accepted it setting a new high in the neighbourhood.
In Case #2, Mrs. Balazovitz was recently divorced and selling her home with me. She wanted multiple offers but didn’t want to list it at a low price. The market value according to neighbourhood sales ranged from $490,000 to $510,000 and we listed it at $499,000, giving a week until we received offers. To attract multiple offers, I suggest she spend a little bit of money renovating and staging the house. After 2 days of showing, we receive our bully offer of $500,000. The sellers requested that they send it in on the offer date so they can review all the offers at once. On the offer date, the sellers choose another offer at $540,000 with no conditions. The bully offer didn’t work in this case because the sellers felt confident they were going to get their price on the offer date.
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Kirby Chan Sales Rep., Director of Technology & Social Media
Keller Williams Real Estate Service
17 Church Ave., North York
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Multiple offers and Bully offers explained.