What does "backup pending contracts" mean? Are they taking other offers? And this is a HUD.

Asked by Ruth Fasel, Indianapolis, IN Sun Jun 9, 2013

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Jackie Lovell, , Indianapolis, IN
Mon Jun 10, 2013
With HUD homes once and offer has been accepted the HUD website portal used to submit offers is no longer available to submit new bids. The listing agent is the one who has actually opted to show the home as ACT-B (taking back up offers) so that they are still able to receive buyer leads from the home being listed for sale. This also allows them to have a buyer pool for just in case the current deal were to fall apart especially in the first 4 days when getting the HUD documents completed correctly by the buyer is crucial. Hope this helps.
Jackie Lovell
Artisan Realtors
5610 E. Washington St. Indianapolis, IN 46219
Direct: 317-332-7547 jackie@jackielovell.com
0 votes
Mitch Rolsky, Agent, Indianapolis, IN
Sun Jun 9, 2013
As others have already pointed out a back up offer just means you are either first, 2nd, 3rd or whatever position in line to buy the home should the current buyer not be able to proceed. This does not mean it's a HUD home and in fact the back up process for HUD homes is different in that the property will show as pending and when a bid is submitted the buyer simply indicates they want their offer to be considered as a backup offer should the initial buyer drop out.

Regardless of if it's a HUD home or not the important concept is that you can wait all you want, you could be willing to subsequently offer better terms or money or have a more favorable timeline but none of that matters unless the current buyer(s) fail to perform in any of 100 different ways from paperwork, to financing to inspection disagreements. to losing a job etc.

Any more, in the in greater Indy market and many markets, it's rare for a property to be pended but rather it will show as active with some sort of status like Inspection, Contract signatures, financing etc. Agent's can eliminate these properties from what you are seeing when they send you listings but they will continue to show as active (which is misleading) on websites like Realtor.com, Trullia and even many agent websites.

I do not encourage my buyers to "get in line" unless you truly have no time constraints because you can invest weeks and months of time without getting the home. It can also be a very frustrating process when you fall in love with home and then can't buy it because you were just too late!

That said if you decide to get in line you want/need to make sure you have a very well written backup offer that provides effective escape clauses should you find another property and want to easily cancel your back up offer with you earnest money intact to move on to the next place.

Good luck with your search. If you have questions feel free to email or call me.
0 votes
Duane Trinkle, Agent, INDIANAPOLIS, IN
Sun Jun 9, 2013
Ruth, What back up offers means is just that. They have an accepted offer and are taking back up incase the current offer falls through.
0 votes
Kristin Tomyn, Agent, Carmel, IN
Sun Jun 9, 2013
Ive done many HUD contracts and my understanding direct from HUD has always been that "pending contracts" is pending the receipt of the winning bidders actual documents to HUD --- but that they HAVE an accepted contract. Bidding is done online and once HUD accepts a bid then the buyer agent must have the signed original contract documents to HUD (i overnight). If its "pending contracts" you can't "hurry up and submit a bid" or outbid the wining bid or knock them out....that's why they call it a backup. The only way they would go to a backup is if the winning bidder did not send in their contracts or earnest money.

Kristin Tomyn
Century21 Scheetz
317-430-5558
0 votes
Julie Barnett, Agent, Lebanon, IN
Sun Jun 9, 2013
Ruth,

This was the same case I had happen recently and I would say, if you're interested in that house, put your bid in NOW/ASAP!

Let me know if I can help you with anything else. (By-the-way, my client ended up winning the bid.)

Julie
0 votes
Do you bid higher than the asking price?
Flag Sun Jun 9, 2013
Micki Solhan, Agent, Indianapolis, IN
Sun Jun 9, 2013
Hi Ruth, It means that they're accepting backup offers because the house is pending contract negotiations. Call me and I can assist you further. 317-372-3994 or my email address is mickis@talktotucker.com. Thanks!
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