Should I Accept a Bully Offer When Selling My Home?

Lately, the Toronto real estate market has been at a bit of a stand still, with both buyers and sellers waiting to see whether interest rates will go down. In the meantime, activity is on the slower side, but the pent up demand for houses will burst eventually.

If you’re selling a home, the time to start planning your strategy is now so you can be prepared if the market changes quickly. A good place to begin is with a review of offers, how they work, and when to pivot to make the most of your sale.

A Review of Offer Strategies

During slow or balanced markets, accepting offers “any time” is often considered best practice. That’s because you don’t want a buyer’s enthusiasm to cool by making them wait or giving them the chance to find a home they like even better.

When the market is hot, we often switch to an “offer night” strategy. Buyers can schedule a showing, but they have to wait to place an offer until the appointed time, usually about a week after the listing goes on the market. Then, the seller will review all incoming offers with their real estate agent to see what, if any, they will accept. 

Whether to receive offers any time or set an offer date depends on market conditions, but there may be other factors to consider. Generally speaking, an offer night strategy works well whenever we anticipate a lot of interest in your home from multiple bidders. With fewer potential buyers, it’s obviously less effective. In this case, reviewing the offer while the buyer is excited will likely get better results.

Knowing the different types of strategies and when to use them will help you make the most of your sale regardless of what the market is doing. When you have a solid approach, you can decide to sell your home when the time is best for you rather than waiting for the market to change.

Thinking of listing your home in Toronto? The resources below can help you make the most of the market:

• What Are The Fastest Ways To Add Value To Your Home When Selling?
• What to Look For in a Real Estate Agent When Selling Your Home
• Can You Earn More Money By Staging Your Home?

Types of Offers

A buyer also has several options when placing an offer on a home that interests them. 

• They can place a conditional offer, where the purchase is contingent on a home inspection, the sale of their existing home, or the ability to obtain financing. Any offer is better than no offer. However, conditional offers can be stressful for a seller because of the chance that any of the terms fall through.
• A buyer can place an unconditional offer. If there is competition, they are less likely to put conditions on their offer because they will want to stand out from competing buyers.
• If the seller sets an offer night, a buyer might jump in with an pre-emptive offer. This is more commonly known as a bully offer, and it means making an offer in advance of the appointed time. 

What Are the Advantages of a Bully Offer?

Receiving a bully offer might be an encouraging sign that your house is highly desirable to potential buyers. There’s excitement when your home first goes on the market, which means buyers may pay a premium to avoid missing out. 

If the market is competitive, some people might have already bid on several properties and lost each time. They’ll often pay extra to avoid the frustration of losing out again. This is a great position to be in as a seller!

That said, you’ll want to consider very carefully whether or not you will accept it. If you do, there are several advantages.

• Bully offers are typically ‘clean offers.’ This means they come without conditions, so the offer is considered firm. It also eliminates the chance of having to put your home back on the market if a condition isn’t met.
• The sale of your home is over and done with quickly. You no longer have to worry about keeping it show-ready. You may even get to skip out on dealing with the hassle of open houses. This reduced stress is one of the best reasons to accept a bully offer.
• You know how much money you’re getting sooner rather than later, making it easier to begin budgeting for your next purchase.
• Since your home sale is all but assured, you can be ready to pounce on your next place – possibly with no conditions or even with a bully offer of your own to beat other buyers to the punch. 

Disadvantages of Accepting a Bully Offer

A common question we hear from clients is, “Should I accept a bully offer or hold out until offer night?” In short, it depends. Only you can decide if the above advantages make it worthwhile. But before you do, you should also be aware of any potential downsides:

• By accepting a bully offer, you might always wonder about the “what ifs” and “could have beens.” Since many people will not even get a chance to view your home, there is a possibility of missing out on an even more enthusiastic buyer.
• You might have received a higher price if you had waited and multiple bidders competed on offer night. 
• On the other hand, if the bully offer was the best and you turn it down, that particular buyer will likely have moved on. The opportunity will no longer be on the table.

Accepting a Bully Offer: A True Story

Nothing illustrates a point quite like an actual case study in the real world. So here is a true story from one of our clients who decided to accept a preemptive offer.

Our sellers, Jennifer and Andy, received a bully offer within six hours of putting their home on the market. They reviewed the terms and decided to accept it for a couple of reasons. 

• First, it was the price that they were hoping to get for their home. 
• Second, it meant they could get back to normality right away and no longer worry about showings.

They were aware that there was no guarantee that a higher offer would come through if they waited the week out. In fact, we had just been through another situation with a client who decided not to accept a bully offer. By the time offer night came around, they ended up selling their home for a lower price. 

The bottom line is that if you are happy with the price and the terms, accepting a bully offer might be the best course of action. If you or your agent are certain you can do better, it might pay to wait. However, we can not stress enough that there are no guarantees.

Are you selling a home while navigating challenging circumstances? The posts below can help:

• How to Sell an Inherited Home 
• When Is The Time Right To Sell Your Parents’ Home?
• How Does Probate Affect Your Loved Ones When Selling Real Estate?

Keep the Big Picture in Mind

Whether it makes sense to accept a bully offer or not is a personal decision. It’s right for some people and not for others. The amount of money obviously matters a great deal, but there are other considerations. 

Whatever is happening in the current market will be one of the most significant factors. Your real estate agent can help guide you through this tough but important decision.

The difficulty with accepting a bully offer is that everything afterwards is just speculation. The truth is that there will be no way to know what could have happened. You may have earned more or you may have earned less.

The best reason to accept an offer is that you are happy enough to put all of these uncertainties to rest and have peace of mind with the results you’ve achieved.

If you’re thinking about selling soon, and want to get the best price and a fast sale, your ThompsonSells team is here to help every step of the way. You can reach us at contact@thompsonsells.com or call 647-282-7653 with any questions.