Bidding Wars in Ontario: Offer Dates, Bully Offers and Your Rights

In a competitive market you may be one of several buyers chasing the same home. Sellers often set a day and time to review offers, and sometimes an early, aggressive offer (often called a bully or pre-emptive offer) arrives before that. It can feel like the rules are unclear.

This article explains what the seller can do, what you are entitled to learn about other offers, and how conditions and deposits work. It does not cover every local practice, so ask your lawyer or agent about the specific listing.

What a seller can do with an offer

When an offer is received, the seller may accept it, reject it, make a counter-offer, or ask the buyer to revise it. With competing offers, the seller may negotiate with one buyer while setting others aside, and does not have to take the highest price.

So a bidding war is not an auction. Price is only one factor. Sellers may weigh conditions, closing date and other terms, and may choose among them.

Offer dates and early offers

A listing may state a date and time when offers will be reviewed. In plain terms, that is the seller's plan for how to handle offers, and an early offer is a way for a buyer to try to lock in the deal sooner. Whether the seller looks at an early offer is their choice, and the rules above still apply to whatever offer they receive.

If you are thinking of submitting an early offer, ask your agent or lawyer how the seller has said they will handle offers, and what your offer would commit you to if it is accepted. Be sure your financing, deposit and conditions are ready before you submit.

Can the seller disclose competing bids?

A buyer who has made a written offer is entitled to know the number of competing offers, but not their amounts or conditions. This means you can find out how many others there are. You cannot demand to see the price or terms of the other bids.

Treat any claim about other offers with care, and base your decision on your own budget and risk, not on pressure.

Conditions, backup offers and deposits

A conditional agreement is not final and binding until all its conditions are met or waived, so a seller who has accepted a conditional offer may still consider other offers. The seller protects itself with an escape clause that requires notice to the first buyer and gives that buyer a set time, for example 48 hours, to waive or satisfy its conditions.

If the first buyer waives or fulfils its conditions within the deadline, the seller must sell to that first buyer on the original terms. A backup offer should therefore be made conditional on the first deal ending, so the seller does not end up selling to two buyers.

• Conditions such as a satisfactory home inspection must be waived or performed by the agreed time and must be used in good faith. Once all conditions are waived, the agreement is firm and binding.
• Paying the deposit late or withholding it can itself breach the agreement, and may give the seller grounds to terminate and seek damages.
• The deposit is normally held by the brokerage in a real estate statutory trust account, and can be released only with a mutual consent or release signed by all parties, or under a court order.

What to do next

• Get mortgage approval and know your limit before you bid.
• Ask how many competing offers there are, remembering you are entitled to the number but not the amounts or conditions.
• Decide in advance which conditions you need and which you can safely give up.
• Have your lawyer review the offer before you sign, ideally before submission.
• Have the deposit ready to deliver on time.
• If you are making a backup offer, make it conditional on the first deal ending.

Frequently asked questions