“It seems to be the year of the bully (in the Toronto real estate market),” Mark Savel, a real estate agent with Sage Real Estate, told REP. “We’ve seen these types of offers more and more over the last six months with prices the way they are in Toronto and parts of the GTA right now. Buyers are just waiting in the wings, ready to table these offers and present ‘bully’ bids that are $150,000 over asking at times.”
His comments come following recent reports from the Toronto Real Estate Board (TREB) this week that showed that high-end houses have drawn a greater piece of the pie for overall transactions this year compared to last, pushing up the average selling price.
TREB reported sales jumped 18.4 per cent last month compared with June 2014 while home sales were up 18.4 per cent from June of 2014. The average sale price hit a record $639,184, up 12.3 per cent year over year.
At a time when supply remains low and demand continues to skyrocket, many buyers are fighting to get into the market by overbidding to limit the amount of competition from other prospective buyers. At the same time, these offers are enticing sellers, who can sometimes get more than $200,000 over the asking price if patient enough, to bypass scheduled offer dates.
The idea of bully bids have frustrate many agents in the past because it makes it difficult for them to compete. While Savel believes that everyone should have a fair chance to make an offer, bully bids play well for sellers’ and agents who work with them. Still, not everyone is sold.
“It’s difficult to get a decent house in the central core without encountering competition,” Marie Natscheff, who added bully bids are especially common in the detached market in central Toronto, told REP. “We certainly don’t like (bully bids) because it creates a lot of hard feelings. It comes in late at night, your clients aren’t expecting it. It makes it difficult for people to compete.”
Agents opposed to bully bids being forced to play ball with pre-emptive offers and prospective buyers in a hot sellers’ market in Toronto where some are seeing more and more ‘bully’ offers.