The seller’s representative refused to present my bully offer. How can that be?

Before I answer your question, I’d like to explain the concept of a pre-emptive offer (commonly known as a bully offer), for the benefit of other readers.

Typically, when a buyer submits a written offer, they can expect that the seller will see it right away. In fact, under normal circumstances the seller’s representative is required to convey an offer as soon as reasonably possible. However, sellers sometimes provide the brokerage, broker or salesperson with a written direction that instructs their representative to hold all offers until a specific date and time, and not to present any offers until that time.

Why would a seller want to delay offers in the first place? In most cases, sellers do this so that their home has time to get exposure and build demand. It’s like announcing the release date for a new movie or book—it’s an opportunity to build some anticipation. Ultimately, the goal is often to encourage a competing offer situation, commonly referred to as a bidding war.

Even if a seller has provided a written direction to delay offers, some buyers will make a take-it-or-leave-it offer that may expire before other offers will be presented. That’s the pre-emptive offer.

The seller’s representative will be obligated to present the pre-emptive offer to their client, except if they have very specific instructions not to do so by their seller. It all depends on the details of the written instructions that the seller provided.

MLS® listings will indicate this information in the “remarks” section. For non-MLS® listings, you can find out by making an inquiry or by requesting a showing through your representative.

That’s why I advise sellers to be very specific in their directions, so that the proper course of action is clear. Of course, I want to stress that these written directions should be based on informed decisions. Sellers must have a thorough conversation with their representatives on their various options before deciding what to do.

If the seller sets a date and time that they want to receive offers, they should also dictate whether or not they want to see pre-emptive offers. If the seller’s written instructions are unclear, their representative should first confirm their instructions. The instructions should be clear about what is to happen if, for example, an incredible offer comes in that is set to expire before the presentation date.  In any case, the representative must always explain the benefits and risks involved in entertaining or declining to see a pre-emptive offer, and obtain the seller’s informed written direction to their decided course of action.

If the seller does, in fact, change their written directions, the seller’s representative must notify you as a prospective buyer of any change in a timely manner, if you and your representative expressed an interest in the property (ideally in writing) to the brokerage and its representative. But all of this may happen very quickly.

Delayed offers add an additional twist when you’re looking to buy a home. If you’re thinking about making a pre-emptive offer, talk with your real estate professional about the pros and cons of that approach versus waiting until the specified date and time.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

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