New Toronto phenomenon throws rules out the window

by Olivia D'Orazio29 Apr 2015
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…
“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.”


  • by EddieN 4/29/2015 12:10:09 PM

    Integrity? Seriously? As a listing agent, you are looking after the interests of your client, the seller. You are also obligated to present all offers, regardless of the offer date. So, if the seller chooses to accept the offer, it is their right. The last thing we need is more ridiculous rules. Act according to the rules with your client and be courteous to other agents. That's all there is too it. Just because your buyer didn't act quickly enough, is not anyone's fault. Maybe you, as a buyer's agent, should have been more proactive and professional in education your buyer?

  • by judy 4/29/2015 2:08:39 PM

    You have sales data, use it to price the listing so no one has unrealistic expectations to steal it!!! This really just sounds like the way Court Ordered Sales happen here in BC.
    Of course the seller and their agent want the cleanest and highest offer, and of course the buyer and their agent want the most safety and lowest price guaranteed.
    Simple Economics of Human Nature.....the fact is a sale doesn't happen without compromise, and depending on market conditions, one party usually has to compromise more than the other!!!!
    Quit pointing fingers!

  • by Peter B. 4/29/2015 2:41:58 PM

    Eddie, you contradict yourself. Judy, what exactly are you trying to say?
    Yes, our job as a seller's agent is to get the highest price for our seller. There is no way to prove that a successful bully bid is in the best interests of the seller. How can a buyer act quickly if the property is sold before the friggin sign is posted or before they can even get in for a viewing? Sleazy agents are good at pulling this "sold in one day" crap and the integrity of this profession suffers because of it.
    Any seller's agent that let's their seller fall for a bully bid is doing a half-ass job and any selling agent that pre-sells a property before showings can occur, or pre-sell a property then post it as available with a SC clause and no escape is cheating their seller.
    In a proper market, there is no compromise, a property will sell for the highest amount an educated (or intelligent) buyer will pay but only when the property is properly exposed and offered for competition.

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