If you’ve been paying attention to the Canadian real estate land lately, you’re probably familiar with the term “bully offer.” With a name like that, it’s unsurprising that many homeowners consider bully offers to be red flags. While many are aware of this issue in the homeowner market, many don’t realize that in the hottest markets, it has become an issue when trying to find a home to rent.
What is a bully offer?
A bully offer is also known as a pre-emptive offer, where the offer is given ahead of time and above asking price. The buyer submits a very high offer on a listed home before the date the seller has indicated they will begin reviewing offers. In other words, they’re a high-pressure tactic that attempts to force the seller to take their offer before considering any other offers.
Who is the real bully?
Plenty of REALTORS® are pushing for the government to outlaw bully offers. The Financial Post reports that Canada’s housing market is already unstable enough and pre-emptive offers create an unequal playing field. Many agents are fierce opponents of the bully offer and believe the practice is disadvantageous for prospective buyers. Other REALTORS® disagree, reluctantly acknowledging that while bully offers are inherently unfair, they aren’t going away.
How does this affect renters?
As the cost of living becomes increasingly high and housing becomes more and more competitive in all major Canadian cities, the rental market is seeing a bully backlash, as well. Once known strictly as a real estate issue, now renters are going head to head over favoured properties. In an attempt to win over a landlord before they can look at other potential renters, renters who can afford it are offering more than the listed asking price per month, giving more than first and last, and making all kinds of extra offers in order to land a specific rental.
What can be done?
Unfortunately, there isn’t much that can be done to stop a landlord from accepting this kind of offer before considering other renters. It can be very tempting to take an offer like this, and if no one else knows about it, no one can complain about it. That said, if you have been given a tentative “yes” from a landlord for a rental, and they go back on the deal because they have a better offer, you should contact your local Landlord and Tenant Board to report their practices.