This is an interesting topic simply because most home buyers or sellers never heard the term before. How to deal with a “bully offer” is also an issue within the real estate industry amongst some Realtors as they Do Not understand the rules of how to process.
A bully offer only happens when a seller instructs its Realtor to hold an offer date when listing a property for sale on the open market. The instructions are very clear and concise. All offers (if any) will be presented on a date and time specified on the listing agreement. This means that the seller shall review offers from any potential buyer on that specified date, this is a strategy that some Realtors have been using for some time now to generate higher then normal demand for the subject property.
Having said that their are some buyers who do not want to wait until the offer date as they believe there will be less competition by submitting their offer earlier. This buyer strategy is referred to as a “bully offer.” Now this strategy of basically force feeding a seller with an offer before the target date only works if the seller is interested in entertaining the idea all together. In the event the seller does entertain a bully offer it’s only because of the fear factor of not receiving any offers on the targeted date set within the MLS listing agreement. What is so ironic about this whole deal is that the buyer thinks they’re the only one who would be attempting to purchase the home prior with a bully offer, so they think! You see friends, the listing agent has a legal obligation to call every single agent that has shown the home during the listing period and make them aware that a bully offer was coming in, further not only are they obligated to call the other prospective buyers but they are also obligated to give ample notice so that any other buyer can also register an offer and present at the same time as the original bully.
For a buyer to think that there is a strategic advantage in submitting the bully offer, they are completely misled.The sad part in all of this is that most Realtors have no idea that they are required as per the Real Estate and Business Brokers Act to call very single buyer and buyers agent to let them know that an offer is being presented prior to the date stated in the listing.
In my opinion there is no advantage for a seller to even entertain a bully off, the whole point of holding offers to a specific date is to generate an offer price higher than asking. Bully offers are submitted with the hope of buying the home below market value, the flip side is if the seller's agent is astute enough to generate more than one offer even while a bully offer is being submitted, again friends there is absolutely no value in submitting a bully offer.
If you would like to learn more about buying strategies or selling strategies for that matter please feel free and contact Vincent La Fiura, as he will be more than happy to sit down with you and explain different marketing strategies that suit your need.