An issue came up recently that I wanted to address.  I have a client that wants to move from Milton to Kitchener, Waterloo. There was a house that they were interested in that was listed at about $1.1M and they asked if I could show it to them.  I was honest and told them that it was a little bit out of my usual area, but I do have a really good agent that I refer people to in that location.  

So I referred them out to her, but in the meantime (since I'm a member of the Kitchener Waterloo Board) I said that I would do some research on it.  It's about 2400 square feet, listed in Waterloo at about $1.1M and I did the research on it and thought it would go for about $1.3-$1.35M, somewhere in there.  It was underlisted, as most are these days. My clients were very appreciative, thanked me for the help and said they would contact the agent. 

The next day, they did the showing and the agent contacted me to say thanks for the referral Cliff.  I asked her what she thought the house would go for. She said it was really hard to tell, but would probably go in the $1.25-$1.3M range, considering the houses in the $1.3-$1.35M range are bigger. 

The following day she informed me that my clients were going to put in an offer, which I thought was great.  I asked her what they were going to go in at.  $1.35M - not bad, but a little lower than I thought they would.  They went in at $1.25M and I checked in with her later to see how it went.  They lost.  She called me the next day to inform me how much the property actually sold for.  You'll never believe this - it sold for $1.53M. 
In keeping with that logic, if I was the seller and I had interviewed a few agents and they all said that I would probably get $1.3-$1.35M, imagine if on the first day listed, someone said they would give me $1.4M? There's a good chance I would take it. But they would miss out on all the showings over the weekend and all the hype that was built up (the "auction") on the offer date - and they would net $130,000 less.

When it comes to taking a pre-emptive offer (bully offer), it's got to just "blow your socks off" to take it.   I just sold one a couple of days ago in Brampton for $250-$260K over the asking price.  I had so many agents asking "will they take a pre-emptive"?  I had to keep saying "no" but I think we made the right decision, because we knocked it right outta the park.

So, the moral of the story is:  when it comes to a pre-emptive offer, it's better to just say no and move on.  Consider this - what are the chances of another property coming up in the 4 or 5 days that you have it listed, that's similar to yours, that's going to compete against yours?  Very, very slim.  So, in my opinion, when it comes to pre-emptive offers, 90 something percent of the time, I would say "no".  It's almost always better to hold off until the offer date.