Have you found yourself searching for your dream home, only to end up being outbid at the last moment?
Being on the losing side of a bidding war is a less than an enviable position to be in, both as a buyer and an agent. Still, it’s essential to understand that you could still end up getting your dream home.
How? By submitting a well crafted back-up offer, should the previously accepted contract fall through.
What is a Back-up offer:
A back-up offer is a legally binding primary purchase agreement for a property that is already under contract. For example, you could submit a back-up offer after being on the short side of a bidding war or on a house that is already under contract. If the binding agreement falls through for any of the reasons discussed below, your contract becomes the new binding offer.
Benefits To Buyers:
Real estate deals can fall through at any time throughout the process. If you’re in the market for a home and either lose out in a multi-bid situation or find the home you want under contract, don’t be afraid to make an offer. A deal is never done until closing.
Benefits to Sellers:
If you’re selling your property and have multiple offers, you’re likely to be coming out with a good deal. Back-up offers a sign of a competitive and desirable property. Back up offers also provide an incentive during further negotiation and give you leverage in keeping a smooth transaction to the finish line.
The Complexity Of Real Estate Contracts
In real estate, a deal is never done until closing has commenced. While some transactions are as simple as an all-cash, full asking price transaction with a quick close, others are laced with contingencies related to inspections, appraisals, and financing.
At any point during due diligence or if you hit a snag during the mentioned contingencies, a deal can fall through and be back on the market.
In the instance you have a back up offer on a property and the original deal falls through, you’re first in line with a binding agreement. The property never hits the market and you’re in a contract, right where you wanted to be all along.
Should the home you want hit a snag and fall through on any of the above contingencies, submitting a back-up offer puts you right where you want to be: in contract with the seller to purchase your dream home.
Like every person, every real estate transaction is different. We all have different wants, desirs, and needs when it comes to buying or selling a home. Should you find the right home or offer for you, it’s best to reach out to the Kim and Lin Logan Real Estate team to discover all the options available to ensure a smooth and profitable transition.
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