Linda A. Cappello. Broker, GRI, ABR's Blog
When you find a home you love, you most likely will want to take the steps you can to buy it. When a home is already under contract, there’s actually a little-known strategy that can be used to help you have a chance at getting the property.
When you make a backup offer, you’re doing all of the same things you’d do under normal circumstances. The only difference between a normal offer and a backup offer is that you’re not guaranteed to get the home. The first deal needs to fall through in order for you to have a shot.
Advantages To Backup Offers
The backup offer is a bit of a stretch, but it still does give you a little bit of a chance to get a home. When a backup offer is in place, the home won’t just go back on the market if something falls through. This is especially smart when it comes to lower inventory markets. When a home is re-listed, you’ll need to compete against other buyers. If a bidding war is initiated, the home’s price will keep going up. The backup offer being in place helps the seller to feel secure in the sale of their home one way or another. If for any reason the first buyer falls through, you’ll be able to swoop in and get the home yourself.
Timing Is Everything
Keep in mind that there’s a certain period of time before a deal needs to be closed on for a home. The original buyer will need to close the deal on the home in an average of 50 days. Knowing the time frame that you’ll need to wait around for a decision is helpful for you in your own search for a home.
You can also have your agent check in with the listing agent for the property on a frequent basis. This lets the agent ad seller know that you have a keen interest in the property in case there are any difficulties coming from the other side of the deal.
If The First Deal Doesn’t Go Through
If the first deal on a home does fall through, you’re not the new owner of the home just yet. There’s always a possibility that the first buyers found some very difficult problems with the home during the inspection. These could be big issues like an issue with the roof or the foundation of the home. Be sure to include a home inspection contingency with your contract so that you can have your own inspection conducted. This way, you’ll know if there are any problems with the home and that you will be able to deal with them.
A backup offer can be a great tool to use in tight markets to help you get a home that you love. It’s always a good idea to proceed with caution in any home deal to make a sound financial decision.