My salesperson showed us two property listings and, in both instances, we wanted to submit an offer. But the properties were sold before the posted offer date. How can this happen?

Buyers are sometimes surprised when a property they were planning to offer on is sold before the posted offer presentation date. They may have booked a showing, discussed an offer with their REALTOR®, or even been preparing documents, only to discover that the seller accepted another offer before the date originally advertised.

In a competitive market, this usually happens because the seller received what is known as a pre-emptive offer, commonly referred to as a “bully offer.”

A seller may initially decide to delay the presentation of offers until a particular date and time so that the property has greater exposure to the market and interested buyers have an opportunity to prepare their offers. In some cases, this strategy is intended to encourage competition among buyers. In others, the timing may simply reflect when the seller is available to review offers.

A pre-emptive offer changes that process because a buyer submits an offer before the scheduled presentation date, often with a relatively short expiry time. In effect, the buyer is asking the seller to decide whether the offer in hand is attractive enough to justify abandoning the original plan and making a decision early.

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Why a Seller May Decide to Consider an Early Offer

From the seller’s perspective, there can be good reasons to consider a pre-emptive offer.

The buyer may offer a strong price, a substantial deposit, few conditions or a closing date that works particularly well for the seller. The offer may also provide a level of certainty that the seller values more than the possibility of receiving several offers later.

At the same time, accepting early means giving up the remainder of the planned marketing period. Other buyers who intended to submit offers may never have the opportunity to do so, and the seller will never know with certainty whether waiting would have produced a better result.

That is why the decision should not be based only on the fact that an early offer has arrived. The more useful question is whether the terms of that offer are strong enough to justify changing the seller’s original strategy.

Pre-emptive offers are not prohibited in Ontario. Where the seller has given instructions to consider such offers, the listing representative must present the offer to the seller. If the seller has specifically instructed the representative not to present pre-emptive offers, those instructions govern the process.

This is one of the reasons the seller’s instructions should be discussed before the property is listed. It is much easier to decide in advance how early offers will be handled than to develop the strategy for the first time while an attractive offer is already expiring.

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What Happens to Other Interested Buyers?

When the seller changes the planned offer presentation process and decides to consider an early offer, the change can affect other buyers who have already expressed an interest in the property.

The original article explains that interested buyers may include those who have booked appointments, already viewed the property, advised the brokerage that they intend to submit an offer, or have already delivered an offer. The intention behind notifying those buyers is to give them an opportunity to respond to the changed timing and, from the seller’s perspective, preserve the opportunity for competition.

This is important because a delayed offer presentation strategy creates expectations in the marketplace. Buyers may reasonably plan their financing, inspections, legal review or offer preparation around the stated presentation date. When that date changes, they may suddenly have much less time to make decisions.

That does not mean the seller must wait for every interested buyer, but it does illustrate why the process needs to be managed carefully and communicated properly.

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Competing Offers Create Their Own Pressures

Whether the competition occurs on the original offer date or because a pre-emptive offer causes other buyers to respond early, buyers can find themselves under significant pressure.

They may feel that they need to increase their price beyond what they originally intended to spend, shorten the closing period, increase the deposit or remove conditions in order to make the offer more attractive. The original article appropriately cautions buyers about this pressure because competition can easily turn the objective from purchasing the right property on acceptable terms into simply “winning” the bidding process.

Those are not the same objective.

A buyer who succeeds in acquiring the property but has paid substantially more than they can comfortably afford or has removed protections they genuinely needed may not have achieved a particularly good outcome.

That is why the decision should still begin with value and affordability. The buyer should have a realistic view of what the property is worth to them, what the available market evidence supports and how much they can comfortably pay without creating unnecessary financial pressure.

A competitive offer may need to be strong, but strength should not be confused with abandoning financial discipline.

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Conditions Still Matter in a Competitive Situation

One of the greatest risks in a bully-offer or multiple-offer environment is that buyers begin to view conditions only as obstacles to success.

A financing condition, inspection condition or other due diligence protection may make an offer less attractive to a seller, particularly where competing buyers are prepared to submit firm offers. That competitive disadvantage is real, but so is the protection the condition was intended to provide.

The decision should therefore be based on whether the buyer has resolved the underlying risk, not simply on whether removing the condition may improve the chances of acceptance.

For example, a buyer who removes a financing condition is still exposed to financing risk if the lender later declines the mortgage or the appraisal does not support the purchase price. Similarly, removing an inspection condition does not improve the physical condition of the property; it simply means the buyer has chosen to accept that risk without the contractual protection of further investigation.

There are circumstances where an unconditional offer may be appropriate, particularly where the buyer has completed sufficient due diligence in advance or is financially capable of assuming the additional exposure. The important point is that the decision should be deliberate.

A competitive market may change the negotiation strategy, but it does not eliminate the consequences of the commitments being made.

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Price Should Be Considered in Context

The original article makes an important observation: offering substantially more than the expected value of the property may increase the buyer’s chances of being successful, but that does not automatically mean doing so is in the buyer’s financial best interest.

That principle becomes even more important when emotions are running high.

A buyer who has already lost several properties may become increasingly willing to stretch the budget or remove protections simply to avoid another disappointment. The problem is that the financial consequences of the purchase may continue for years after the bidding process has been forgotten.

This is where professional advice should provide some discipline.

The REALTOR® can help the buyer look at comparable sales, current competition, property condition, financing considerations and the overall transaction structure. Other professionals may also need to be involved depending on the circumstances.

The objective is not to discourage the buyer from making a competitive offer. It is to make sure that the offer remains a decision the buyer can live with if it is accepted.

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A Pre-Emptive Offer Changes the Timing, Not the Need for Judgment

Pre-emptive offers can be frustrating for buyers who expected more time and attractive for sellers who are presented with a strong opportunity earlier than expected. Neither reaction is unusual.

The important point is that the shortened timeline should not replace the decision-making process.

For the seller, the question is whether the certainty and terms of the offer in hand justify giving up the remaining market exposure and the possibility of later competition.

For the buyer, the question is whether the price, conditions and obligations remain acceptable even though the opportunity to decide has arrived sooner than expected.

Both sides benefit from having thought about those issues before the pressure of an expiring offer begins.

That is why I view bully offers less as a special category of transaction and more as a situation where the normal real estate decisions have to be made in a compressed period of time.

The need for judgment does not disappear simply because the deadline is shorter.

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Keep the Objective in Sight

A buyer’s goal should not be merely to defeat the competition. The objective is to acquire a property that makes sense at a price and on terms the buyer is prepared to accept.

Similarly, a seller’s objective should not automatically be to wait for the largest possible number of offers. The better goal is to obtain the combination of price, certainty, timing and terms that best supports the seller’s circumstances.

A pre-emptive offer can produce an excellent outcome for either side, but it can also create pressure that leads people to move more quickly than the decision deserves.

The strongest approach is to understand the market, establish priorities in advance and make sure that urgency does not substitute for analysis.

For me, professional advisory is about providing clients with the information they need to make informed decisions, because smarter real estate decisions lead to better outcomes.

For more detailed information please click these links: Pre-emptive offers and delayed offer presentation process.

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Written by Rodney Harvey, Broker of Record at Konfidis, Brokerage providing advisory-focused commercial, industrial, investment, and real estate brokerage services across Oshawa, Durham Region, and Ontario.

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