What is a ‘Backup’ Offer?

[ 0 ] September 23, 2016 |

So, what is a “backup” offer? A backup offer, simply stated, is when a second buyer comes along and likes your home enough to bet on the possibility that the first contract falls through. If the second buyer writes a backup offer, and if you accept it, and if the first contract does fall through, the backup offer will immediately take effect as the active contract. If the second buyer does write an offer, we go through the negotiation process just like we did with the first contract. You evaluate the dates and deadlines, and the price, and you decide if you want to accept, counter, or deny the offer outright.

Frankly, it isn’t likely you will receive a backup offer — however, even given their infrequency, it is our opinion that leaving the door open for such an offer can’t hurt. Being open to a backup offer also means maintaining your home as available for showings (making beds, wiping crumbs off of kitchen counters, keeping clutter to a minimum, etc.).

Once your home goes under contract, we are obligated to change the “status” of your home. That is, we have to let potential buyers and agents know that your home is under contract. How we do this is up to you, and what you decide will determine whether or not you have the possibility of receiving a backup offer. You will decide whether you want the status of your home to change to Under Contract/Backup or to Pending. By changing the status to Pending, you are effectively telling buyers and agents that you want no more showings. You may decide to go this direction because it’s too much work to get your home ready, or maybe because you are tired of leaving every time someone wants to see your home; by identifying the contract as Pending, we will receive no requests for showings, and as a result, you will have no potential for receiving backup offers. If, however, we identify your listing as Under Contract/Backup, we are effectively telling agents and potential buyers that you are still willing to show your home and that you would consider a backup offer. These are the only two options available to us — it is not an option to leave the home listed as it was before; that is, once your home goes under contract, we are obligated to change the status, letting buyers know your home is under contract.

Category: Real Estate

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