What Is a Bully Offer in Toronto Real Estate?
A bully offer is an offer a buyer submits before the seller's scheduled offer date, usually at a strong price and with a deadline that expires before offer night. In Ontario the formal term is a pre-emptive offer. It is legal, but the seller never has to look at it.
Picture a semi in Leslieville that lists on a Wednesday with offers held until the following Tuesday. On Friday a buyer registers an offer well above asking, with an irrevocable window that closes that night. The Real Estate Council of Ontario (RECO) describes a pre-emptive offer as one where the buyer does not follow the process the seller set out for presenting offers.
What the rules require
Before a held-offer listing goes live, the seller's agent has to explain how a pre-emptive offer might arrive and get the seller's written direction on handling one. A seller can ask to hear nothing, to be told one came in without its terms, or to see only offers above a set price. A vague line in the listing notes does not meet that duty, according to RECO's bulletin on managing a pre-emptive offer.
If the seller decides to consider one, the agent must take all reasonable steps to notify everyone who has shown interest in the property. That includes people with a showing booked or already done. The notice says a pre-emptive offer was received and gives the new presentation time if it changed.
What it means if you are buying
Most of these offers are firm, so the financing and inspection homework has to be finished before you write. There is a second risk. Once the seller agrees to consider yours, the other interested buyers are told, and you can end up in the bidding war you were trying to skip.
What it means if you are selling
Decide your answer before the sign goes up, not at nine o'clock on a Friday with a deadline two hours away. Many sellers write a threshold into their direction: a price, plus terms such as no financing condition. Considering an offer does not oblige you to accept it. You can sign it back, or let it expire and keep your date, which is how competing offers normally unfold.
Related reading: How Do Competing Offers Work in Ontario Real Estate?, Why Do Homes Sell Over Asking in Toronto? and What Is Multiple Representation in Ontario Real Estate?.
