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Ontario Realtors Want Ban on Bully Offers

Ontario Realtors Want Ban on Bully Offers
3 min. read


Realtors in Ontario are asking the provincial government to ban bully offers in the home purchasing process, which they say can give an unfair advantage to home buyers who use the tactic.

Bully offers are especially common in highly competitive urban markets like Toronto. The practice involves a buyer submitting an offer that is significantly higher than the asking price, often before a seller’s established offer date, with no conditions, and often with a short expiry time frame.

Buyers who use a bully offer are hoping to avoid competing with other buyers by pressuring the seller into accepting the bid without considering any other offers. This can be a frustrating experience for buyers and real estate agents who have spent time viewing a property and are trying to follow the standard bidding process.

OREA Seeks Ban

The bully offer ban is one recommendation of 28 that have been submitted to the government by the Ontario Real Estate Association (OREA) as the province reviews the Real Estate and Business Brokers Act, which was put in place back in 2002. The OREA represents 78,000 real estate brokers and salespeople in Ontario.

The OREA had approached the provincial government about reviewing the act last fall, hoping that updates could be made to the legislation that would allow for more transparency for buyers and sellers in the Ontario real estate market.

OREA President Karen Cox said when speaking to The Star, that banning the bully offer practice will ensure that sellers are able to carefully consider bids from all interested buyers. It will also enable all interested buyers to make a fair offer on a home.

“It creates an unfairness in the home buying process. It doesn’t give all buyers a fair shot to make an offer and a seller a chance to consider all the offers.”

Some Question the Ban

Not everyone in the industry sees bully offers as something that should be banned. Some do not believe that the ban will make the home buying process fairer, but would instead restrict sellers when it comes to what choices are available to them and how they make decisions.

Those who believe a ban is unnecessary say that it is ultimately up to the seller to decide whether to accept bully offers or not. Sellers may accept bully offers when they know that other offers won’t match or exceed the bully offer, or when they want to avoid having their home on the market for a longer period of time.

Speaking to The Star, real estate agent David Fleming said that rather than doing away with bully offers altogether, real estate agents should learn how to use them appropriately for their clients, and sellers should be forced to be transparent about accepting a bully offer, notifying other potential buyers that a bully offer has been made.

Other OREA Recommendations

Along with the bully ban, the OREA is asking the provincial government to no longer allow escalation clauses in offers. These are often used to win over any competing bid by increasing a purchase price automatically above the next highest offer.

This allows sellers to make the next highest bid seem much larger than it actually is, which can potentially result in legal action against the seller, according to the OREA.

Another recommendation is that there be education programs with more in-class training in an effort to help increase professional standards. Cox noted that different expertise is needed depending on what type of property is being sold and where a property is located (waterfront, rural, etc.):

“It would allow for more specialization so you can be recognized as an expert in that area.”

The OREA is also asking the Ontario government to give the Real Estate Council of Ontario (RECO) more authority when it comes to proactively investigating real estate agents who don’t follow industry rules. Cox said the regulator should also be able to remove agents from the real estate industry if they choose to violate established standards.


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