At The Polsinello Team, we understand that navigating the world of real estate can be overwhelming, especially for those who are new to the industry. One term that you may have heard thrown around is "bully offer." In this article, we'll dive deep into what a bully offer is, how it works, and why it's important to understand if you're in the market for a new home.
What is a Bully Offer?
A bully offer, also known as a pre-emptive offer, is an offer made by a buyer to a seller before the seller's set offer date. Essentially, the buyer is trying to "bully" the seller into accepting their offer before any other offers are made. This can be a risky strategy for both the buyer and the seller, as it can potentially result in the property being sold for less than its market value.
How Does a Bully Offer Work?
Typically, when a seller puts their home on the market, they will set an offer date. This allows potential buyers to view the property and prepare their offers before submitting them all at once on the set date. However, if a buyer is particularly interested in the property, they may choose to make a pre-emptive offer in an attempt to beat out any competition.
If the seller decides to entertain the bully offer, they may choose to accept it, reject it, or issue a "holdover clause." A holdover clause allows the seller to hold onto the pre-emptive offer while still allowing other buyers to submit their offers on the set offer date. If no better offers come in, the seller may then choose to accept the pre-emptive offer.
Why Are Bully Offers Used?
Bully offers are often used in hot real estate markets where competition is high. By submitting a pre-emptive offer, a buyer can potentially avoid getting into a bidding war with other buyers and secure the property at a lower price than they would have otherwise. However, it's important to note that bully offers are not always successful and can backfire if the seller chooses to reject the offer or hold onto it.
Should You Make a Bully Offer?
Whether or not you should make a bully offer depends on the specific circumstances of the property you're interested in and the current state of the real estate market. It's important to work closely with your real estate agent to determine the best strategy for your situation.
While bully offers can be a useful tool in certain real estate situations, they are not always successful and can be risky for both the buyer and the seller. If you're considering making a pre-emptive offer, it's important to weigh the potential risks and benefits carefully before proceeding.
Posted by Frank Polsinello on
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