“It’s absolute mayhem out there,” says agent David Fleming. “It’s the Wild West… I would estimate that in the freehold market, a third (of all offers) are bully offers. It’s very frustrating.”
Bully bids, of course, involve buyers attempting to circumvent the bidding frenzy of offer night by enticing sellers enough to accept an early – and hopefully more attractive – offer. But these types of bids tend to create animosity among agents whose clients are fighting for an increasingly short supply of properties in the city.
“It’s difficult to get a decent house in the central core without encountering competition,” says Marie Natscheff, who says bully bids are especially common in the detached market in central Toronto. “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.”
Fleming says many listing agents will try to inform everyone who has “expressed interest” in the property that an early bid has been registered. But that really doesn’t give those interested parties the necessary notice to seriously consider the property.
“It feels great if you win,” Natscheff contends. “But let’s say you’re just thinking about a property. It oftentimes doesn’t give you enough time to think or get your ducks in a row.”
But the Real Estate Council of Ontario hasn’t yet caught on to this new phenomenon and so there aren’t any rules in place that govern bully bids. What it really comes down to, Fleming says, is integrity.
“If someone sets an offer date, you should keep it,” Fleming says. “We’re never going to find rules that satisfy both buyers and sellers.”
In the superheated Toronto market, you have the good in demand for properties, the bad in heightened competition, and as for the down-right ugly…