What is Open Offer in real estate and what are the rules?
“Open Offers” is a term commonly used in real estate to describe a type of offer made on a property that is not exclusive to any one particular buyer. In Ontario, Canada, this type of offer is also known as a “bully offer” or “pre-emptive offer”.
When a property is listed for sale, the seller’s real estate agent will typically set a date for all interested parties to submit their offers. This is known as the “offer date”. However, in some cases, a buyer may choose to make an open offer, which is an offer made before the offer date. The purpose of an open offer is to try and secure the property before other potential buyers can make an offer.
In Ontario, there are no specific rules or regulations governing open offers, but there are some guidelines that real estate agents and buyers should follow to ensure a fair and transparent process. Here are some key points to keep in mind:
The seller must be informed: The seller’s real estate agent must inform the seller of any open offers received before the offer date.
The offer must be in writing: An open offer must be made in writing and include all the necessary terms and conditions, including the purchase price, deposit, closing date, and any other conditions the buyer may have.
The offer must be irrevocable: An open offer is typically irrevocable for a certain period of time, typically 24-48 hours.
The seller can accept or reject the offer: The seller has the right to accept, reject or counter the open offer. If the seller accepts the open offer, the offer date is effectively canceled.
The process must be transparent: All interested buyers must be informed of any open offers received before the offer date to ensure a fair and transparent process.
It’s important to note that open offers are not always successful and can sometimes create tension between buyers and real estate agents. If you’re considering making an open offer on a property in Ontario, it’s recommended that you speak with a qualified real estate agent who can guide you through the process and help you make an informed decision.