Home Buying in Glenview>Question Details

Chald, Home Buyer in Bellevue, WA

Should I submit a back-up offer or move on?

Asked by Chald, Bellevue, WA Sun Apr 1, 2012

I found a "dream" house but was outbid and the house is under contract now. It is a regular-sale property, not an REO or a short sale. Since I really like the house, I am willing to submit a back-up offer in case the primary contract does not go through. But I heard the argument that back-up offers are only used as a negotiating tool by the seller to ensure that the primary contract performs. Should I bother submitting a back-up offer? Or just ask my agent to contact the listing agent to let him/her know that I would be interested in making another offer if the primary deal doesn't go through? Or forget about the house that slipped away and just move on?

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10
Absolutely, put in a back up offer.
How your back-up is leveraged is beyond your control. You can be sure, it WILL be leveraged. However, the presence of a back-up is rarely the issue that makes or breaks the deal. Too often a buyer believes that every event in the buying process is a new negotiation opportunity. With a back-up ready to go, these new negotiation opportunities may be less favorable to the buyer than they have been led to believe. Again, let me repeat, this is beyond your control.

What can happen is the first buyer will bail sooner and you will get the home you want. The other options is you've tied up a small security deposit but was in a position to act should the first buyer fail to execute all aspects of the purchase agreement.

If this IS THE HOME, don't lose it by doing nothing.
1 vote Thank Flag Link Sun Apr 1, 2012
Hi Chald,

If you really like the house, submit a backup offer (if the seller is accepting backup offers). In today's market, you never know if a deal is going to close until it's actually closed. I've had some properties I've listed actually go to the 2nd or 3rd buyer in line. However, in the meantime, keep looking at other properties you may be interested in - you never know, you may find something you like better.

Good luck.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Sun Apr 1, 2012
It would be better to put up as a back up offer. At the same time, continue searching for other like properties. Most of the time you will end up finding a better property. Good Luck!
0 votes Thank Flag Link Wed Apr 11, 2012
I say go for it. Now days...you never know. Follow your DREAM ALWAYS.
0 votes Thank Flag Link Sun Apr 1, 2012
PUT IN A BACK-UP OFFER ASAP!

Don't be distracted that they might use your back-up to push the current buyer. This buyer will end up either buying, not performing or walking away from the property. It's out of your control however, your back-up in first position will lock you in with he seller. It's a fantastic position of control - you will be in contract free of any competition if elevated.

Oggi Kashi - 415.690.3792 direct
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Sun Apr 1, 2012
If this is the right home for you we recommend that you follow the sale to completion. The information you have received about back up offers being used as leverage is accurate but it should not discourage you from persuing your dream home.

Making the listing agent aware of your continued interest and your intention to continue to investigate your options may serve your purpose. Home sales fall apart all the time for a variety of reasons so keeping yourself in the mix(from a distanct) can't hurt your cause.

Good luck,

Bill
0 votes Thank Flag Link Sun Apr 1, 2012
Depends on how much you like the house.

First, as noted below, you heard wrong that back-up offers are only used as a negotiating tool by the seller. Back-up offers are welcomed as a security blanket by the seller, to know that there's another offer in case the first falls through. And they're used by buyers like you who know that some accepted offers do fall through for any number of reasons.

So a back-up offer certainly can increase your odds of getting the home.

Second, also as already noted, you are tieing up some of your emotions and some of your cash in making a backup offer. In addition, you may be losing some time finding other nearly-as-good homes. The one silver lining there is that, the longer the time spent, the more questionable that first offer is. If it closes in the typical 45-60 days, you haven't lost a huge amount of time. If that first one drags on to, say, 90 days, then--yes--you're losing time, but that's a clue that the first offer is having some difficulty.

The item I'd suggest you really factor into the equation is: How much less desirable are the other houses you've looked at? If it's "That was my dream house and I couldn't even imagine living in any of those others," then submit a backup offer. If your answer is "That was my dream home, but I've seen others I'd really like, too. On a scale of 1-10, my dream home was a 10 and those others are 9s," then move on.

Hope that helps.
0 votes Thank Flag Link Sun Apr 1, 2012
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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I usually say there is no such thing as 100% house. Maybe because I am a real estate broker who has seen many houses and know what is customary or not for a community, or maybe because the house is really everything I want, I put in a back up offer on a personal property.

Every Listing Agent wants the same thing - sell the house for as much as possible and on the seller's terms. But not every Listing Agent is the same - they may not want that first contract to go through if the negotiations are going badly. If you truly love the home and are willing to wait a bit to see what happens, and there is nothing else equal or better, then go for it. Make sure that the Realtor checks the box on the sales agreement that there is a Back Up Offer Addendum, and make sure there is a clause in the Back Up Offer Addendum that has an opt out if you need to walk away prior to the first contract being enacted. You may come across something else and not want to be bound.

Pro: If you just wait it out then if the first contract dies, you still might not get the house because somebody else might put in a Back Up offer, or you could compete for an offer. Either way, you lose. The Back Up Offer goes in automatically if the first one fails, insuring that you get it based on the agreed upon terms.

Con: You tie up earnest money and you get emotionally attached to something you might not get. But even without the Back Up, you're probably already attached, which is why you wrote this question.

Good luck!

Cathy Bureau
Broker -Owner
Green Home Realty
0 votes Thank Flag Link Sun Apr 1, 2012
I am not sure where you heard that a back up is used to push the primary to perform, I have never heard that nor do I believe it. If the primary wants to walk away I can't imagine how a back up would persuade them not to. Primaries do fall through now and then so put one in or at least have your agent contact the sellers agent and let them know to say something if the primary starts getting "iffy".
0 votes Thank Flag Link Sun Apr 1, 2012
You can be FINANCIALLY tied to a house, and you can be EMOTIONALLY tied to it.
You are talking about a situation where the odds of it falling through are very small.
You will wear yourself out waiting and hoping.
Move on.
0 votes Thank Flag Link Sun Apr 1, 2012
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