The RAHB Board of Directors recently approved a change to the MLS® Rules to address a very hot topic – pre-emptive offers, also known as bully offers.
So how do you properly prepare for a bully offer?
Step one: If you are suggesting holding offers until a particular day, or your seller wants to delay offers, you must discuss the pros and cons of this strategy with your client.
Step two: You receive clear direction from your client regarding how they would like to deal with bully offers. Using OREA Form #244, Seller’s Direction re: Property/Offers, make sure that your client has clarified how much information they want to receive if a bully offer comes in. Do they want to:
- be notified of pre-emptive offers, without seeing details?
- only consider offers that are above a certain price point?
- consider all offers before the offer presentation date?
- not be informed about any pre-emptive offers at all?
These particulars should be included in the REALTOR® Remarks field of the MLS® Listing.
OREA’s Form #244, Seller’s Direction re: Property/Offers is extremely important because as a REALTOR® you must act in strict accordance with the instructions that you are given. The law is clear: as a registrant, you must convey an offer to your client as soon as possible unless your client has given clear, detailed written direction to do otherwise.
Step three: Of course your client can still change their mind. However, you must make sure that you have a new written direction from your client via RAHB’s Amendment to Listing Agreement form.
Step four: Once you have a completed the Amendment to Listing Agreement form, you must do two more things before you can present a bully offer to your client:
a) update the property’s MLS® listing REALTOR® Remarks section to explain that offers are now being presented.
b) you must notify IN WRITING (text messages and emails are acceptable) anyone who has expressed an interest in the property that offers are being accepted. This includes anyone who has booked a viewing appointment, has viewed the property, has informed you or your brokerage they are interested in submitting an offer, or anyone who has submitted an offer (or offer summary sheet) for the property.
With this clarification about who is considered to be an “interested party” and what is considered written notice, you will be able to deal with bully offers in a fair and transparent manner for the benefit of everyone.
As always, if you have any questions, please contact our MLS® Department at 905.667.4650 or mls@rahb.ca. Our staff will be happy to assist you.