Backup Offers Are Your Friend
In today’s hyper-active housing market, buyers are discouraged when their over-asking-price offer is turned down by the sellers because they accepted another offer. But both buyers AND sellers could benefit by having a backup offer in place in case the primary offer falls apart.
Trigger-happy buyers sometimes rush to make an overly-generous offer in order to win the sellers’ acceptance, then experience ‘buyer’s remorse’ and terminate their contract under the inspection clause. Or the primary buyers’ lender may turn down the financing and the contract may terminate under the loan approval clause. Either way, if the sellers accepted your offer as a backup, you would automatically move up to first position.
It’s important to make your offer as attractive as possible in order for the sellers to accept yours as the backup versus any other offers that were presented. That means offering as high a price as you are comfortable with and otherwise making your offer ‘clean’ with as few contingencies as you are comfortable with.
Sellers, of course, benefit by having a backup offer in place because they can immediately move to the backup contract instead of putting their property back on the market if the first contract falls.
But there are caveats for both buyers and sellers in using backup offers. For example, buyers need to retain the right to withdraw from the backup contract if another home comes on the market that they want to buy. Sellers need to be careful to not act on the backup contract before terminating the first contract in order to avoid inadvertently being obligated to sell their home twice.
The knowledge of an experienced Realtor in situations like this is invaluable. All the brokers on Tupper’s Team can help you navigate this and similar issues in buying or selling your property.