By virtue of its name alone, a bully offer doesn’t sound particularly appealing.

After all, who likes a bully?

In fact, just last month, the Ontario Real Estate Association (OREA) proposed that the province place a ban on the practice of bully offers.

Bully offers, also known as pre-emptive offers, are submitted ahead of the seller’s scheduled offer date. They are typically valid for a short time frame, a move that is intended to circumvent competition from other potential buyers and to place pressure on the sellers.

OREA believes the practice crowds out other buyers, making the process unfair and that it puts undue stress on sellers. The recommendation is one of 28 submitted to the province, which is currently reviewing the Real Estate and Business Brokers Act.

The main reason why buyers make bully offers is to avoid other offers.  The bully buyer is hoping that interest will be relatively low early in the listing timeline before consumers become aware of the property. They jump in with their offer and the buyer just might take it. And even if other buyers are interested the bully offer is hoping they won’t have time to pull together financing or get a home inspection.

Should you accept a bully offer? That depends. If the price is right, why not? That means no more home showings and rushing home from work to stack dirty dishes in the dishwasher or stash unsightly items out of sight. If you are happy with the price, want to be done with the process of selling your home and tend to be a straightforward-thinking seller, this may be for you.

Bear in mind, that for a bully offer to be especially attractive, there should be no conditions. So sellers should expect a firm offer with a sizable deposit. It’s not a bad idea to consider ahead of time what price would prompt you to close the deal.

If, however, you are often uncertain and regretful, this move may not be the one to take. You could end up wringing your hands over what kinds of offers you would have received on offer night. This shoulda-coulda-woulda scenario may haunt you and your finances for months and years. But know that there is also a down side to holding out and that is that, just maybe, that bully offer is your best bet in terms of price and conditions.

Sources: www.cbc.ca