What are the chances of a back up offer becoming the primary offer?

Asked by Conwed, 90804 Sat Mar 13, 2010

Help the community by answering this question:

+ web reference
Web reference:

Answers

14
Sheyenne Sch…, Agent, Torrance, CA
Sun Aug 1, 2010
I've had tons of luck having my back up offers get into escrow and be "THE ONE" that was selected. It all depends on the situation and the property. I've been on both the buying side and the listing side where the back up offer was "THE ONE" that ultimately got the deal. It helps to stay in front of the listing agent and let them know that we WANT that property. You know as they say, Out of sight...out of mind! It's true....when you let them know we are truly interested and the one they should do business with...it works..if that property falls out of escrow and you get a chance at it. I've had agents call me when their property fell out and ask if MY buyer was still interested and we got the deal. You need an agent who will fight for you and be agressive yet nice and never a pest. There is a fine line. But also, I would say..don't put your eggs in one basket. I would
still go shopping and try to find something that you like just as much or even better. You never know, unless you try.
Web Reference:  http://www.shysells.com
2 votes
Sandy Carroll, Agent, Seal Beach, CA
Sun Aug 1, 2010
If you were my client, and you really wanted that house, I'd be calling and nagging that listing agent all the time, waiting for a weak time in escrow. Every escrow has moments when it might be hopeless. If the listing agent knows there is a really interested backup offer waiting, they can lean toward getting out of the other escrow, if the sellers are getting tired of the buyer. Honestly, in many escrows, everyone is tired of everyone at some point. You just make sure your agent is checking on the progress of the other escrow, and making your desire known.

Your question is a few months old, have you bought yet?
1 vote
Win Glas, , Long Beach, CA
Mon Mar 15, 2010
Good for you for asking the question. Depends on the situation. If your Realtor has already spoken to the listing agent for an update on the current offer, information on other offers in a possible back up position, your offer and terms as compared with the accepted offer and the sellers's level of motivation are all factors in getting a backup offer accepted. In addtion, the type of sale, a shortsale, REO or a regular equity sale can influence it as well. My buyers have found some great properties when we dig a little little deeper since not all Realtors will take the time to do the extra work. Is there a particular property you are looking at?
1 vote
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Mon Mar 15, 2010
Conwed:

On certain types of deals, in today's market, there is a good chance a back up offer will get the property. Have your Realtor call the listing agent. If the answer to the following questions is YES, then your chances are greatly reduced (less than 10%) that your backup offer will eventually land the house.
1. The first buyer HAS removed all their contingencies.
2. The buyer is an ALL CASH buyer.
3. The buyer is putting MORE THAN 20% down payment.
4. The property is a short sale with only one lender (and that lender is not B of A).
5. A negotiator was assigned to the short sale in the first 30 days.
6. Escrow is open and the buyer has made a large good faith deposit (3% or more).
7. The buyer has waived or removed appraisal and loan contingencies.

If the response to any or all of these is NO, then your chances increase. In my experience, if the property is a short sale, about 1/3 close with the originial buyer (so you have a 67% chance). Most qualified buyers won't wait 6 months to get an answer on a short sale. They will move on to another property after 30-45 days. On standard sales, the odds are less, but you still have a chance. Here your chances are usually highest where the buyer is making a low down payment and has a low good faith deposit.

A couple of pieces of advice regarding your offer (since you are probably not going to be the only backup offer):
1. Write a strong offer - fair price, short escrow, shortened inspection periods, no or small seller concessions, etc.
2. Have your agent submit a true "backup offer" using the correct C.A.R. form (these are forms provided by the California Association of Realtors and you want to make sure that you submit your offer with a PAA with paragraph 1 completed).
3. Have your backup offer acknowledged in writing (if the seller won't sign the PAA, at least request acknowledgement of receipt of your offer and an agreement to hold it in backup position).
4. Have your realtor check regularly, via e-mail, on the status of your backup offer.

My statistics for success on backup offers? All but 1 of my short sale listings sold to a backup offer (and one of these backup buyers hung in there for 12 months to close the deal). One the buyer side, five of my buyers wrote backup offers - 3 are now owners of the homes they wrote on, 1 just had his offer accepted last Friday and will open escrow today, and 1 had his offer accepted but had to walk away because he received a job transfer. Pretty good odds if you ask me.

Write that strong backup offer if it makes sense and Dare to Dream.

Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
http://shel-lee.listingbook.com
1 vote
Emily Knell, Agent, Huntington Beach, CA
Sat Mar 13, 2010
If you like a particular property submit a back up offer. For extra sprinkles on top, write a letter about yourself and why you would LOVE to own that home! You MUST find a way to stand out to the listing agent, make sure they KNOW you're waiting in the wings should something go array with the primary buyer.

EmilyKnell1@yahoo.com
562-430-3053 cell
1 vote
Dorene Slavi…, Agent, Torrance, CA
Sun May 16, 2010
Dear Conwed,
Yes it does happen that a back up offer will be come primary. It all rests on the strength of the first offer.
Web Reference:  http://www.doreneslavitz.com
0 votes
Chris Goodma…, , Long Beach, CA
Wed May 12, 2010
Please contact me so we can take about your short sale/ back-up inquiry
562-900-8265
chris@brotchuby.com
@chrisgoodmanson
Web Reference:  http://rebelmontheights.com
0 votes
Joseph Hasti…, Agent, Bayside, NY
Sun Mar 14, 2010
Hi Conwed. As you've read by now from the previous responses, your back up offer has two chances...slim and none. But one never knows do one? The buyer with the accepted offer may have bad credit, no assets, low income or in general doesn't have two nickels to rub together. Then again, the buyer may be solid as a rock.

Of course we don't know what your offer was. It may have been a low ball and the accepted offer was higher. In that case even if the current deal fell through, your offer may still not be accepted anyway. Only you know what you offered. We certainly don't.

Time to look for the next house. Good luck.
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sun Mar 14, 2010
Hi there, not sure if there is a good statistical answer to your question; however, the challenges of our current market makes the chances more likely, though I think it remains limited. You are hoping that the primary offer hits a snag -- buyers remorse, perhaps inspection issues, or mortgage issues. These are very real possibilities, though not statistically likely -- and so, while it surely makes sense to keep your hat in the ring "in case", don't count on it.

My suggestion is this - have your offer retained by the seller's attorney as back-up and keep looking.

Best,
Jeanne Feenick
Unwavering Commitment to Service
My Blog: http://www.trulia.com/blog/jeanne_feenick_-_new_jersey/
Web Reference:  http://www.feenick.com
0 votes
Monique and…, Agent, Beverly Hills, CA
Sun Mar 14, 2010
Hello Conwed,

I am sure there are exact stats for this but I would say 25%. That's from my experience. Make sure your agent has the seller officially make your offer the back up offer by signing off on it.

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
mcarrabba@kw.com
(323) 899-2900
0 votes
Cami Pinsak, , Camarillo, CA
Sat Mar 13, 2010
I think you have a decent shot. The key here is not to put all your proverbial eggs in one basket. Especially on a short sale - often times the listing agent goes through multiple buyers for reasons already listed. There is a way to contractually place yourself in back up position. You can submit CAR form PAA which has a paragraph that specifically puts you in ______ position.
Some agents think it is unethical to float multiple offers and/or backups on short sales. I disagree. Until the bank approves your specific contract, there is no binding agreement ( if your agent has executed the proper contracts). If you find a house that is a "go" - simply have your agent let the other agents with whom you have backups know. Very transparent and ethical.
Good Luck
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sat Mar 13, 2010
Problems with financing happen. Buyers find problems and walk away. Anything is possible. Your odds are 50/50. You will(50) or you won't (50) I bet you end up in the wrong 50. I would not count on it and look at other houses. You might find something better. It seems anytime it was me hoping it never worked out. Look around, why wait if you could a not get up to bat and b be told no to low an offer anyway?
0 votes
Dianne Hicks, Agent, Rancho Bernardo, CA
Sat Mar 13, 2010
Conwed
I think the odds are extremely Good. I think at best maybe 1/3 of the original first positions stick around, at least in my area. Right now, one that I just went to look at, they are on their 3rd buyer. Fly a few offers in backup and odds are good. Your odds go much higher with agent that does not keep in contact with buyers agent. They get frustrated and move on.

What I often do in check in with listing agent once every 2 or 3 weeks and see if they are still around. I try to have my offer match the one that is in first position. Then easy to resubmit my buyers offer. Just closed 2 short sales in Jan/Feb where my buyers got them due to the fact they lost the previous buyers.

Good Luck
Web Reference:  http://www.di4homes.com
0 votes
Glenn Gaspar, Agent, Signal Hill, CA
Sat Mar 13, 2010
Hello Conwed,

A back up offer becoming a primary offer is slim, but possible if the offer is on a property going through a short sale. Because of the time it takes a lender to respond to a short sale offer, some buyers become impatient and just walk away. This in turn creates an opportunity for a buyer who is in the position as a back up offer. Though please note that the whole process for the short sale will have to be restarted with the new offer.

I personally have two of my buyers as back up offers just in case for one never knows what might happen.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more