What happens if I put in a back up offer on a home?

Asked by Looking, Huntington Beach, CA Mon Oct 29, 2012

For instance, when does the seller get to see the offer (immediately, or after the primary offer has fallen through), and what happens if I find another house I want to put an offer on while I'm waiting for the seller to see the back up offer? Any other things I should be concerned about or other advice on back up offers?

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xaviersaa, , Huntington Beach, CA
Tue Oct 30, 2012
The good thing about your situation is the seller would most likely not ask for backup offers if the seller didn't feel there was a good chance the offer in hand might blow up or go away. Generally, if you're the second person in line, you might very well end up buying that home. But I can understand your reluctance to make a backup offer. Nobody wants to play second fiddle except second fiddle players.

A backup offer needs to be signed by all parties to the contract to be effective. Sellers can sign more than one backup offer providing the seller makes the position of each party known. For example, you could be in #3 or #4 position if there are four backup offers. Ideally, you want to be in #2 position.

Xavier Saavedra
714 655 6106
DRE 01304438 NMLS 333608
0 votes
John Alesi, Agent, Rancho Santa Margarita, CA
Mon Oct 29, 2012
If you truly find a home that you like and can qualify to make the purchase, you should place a back up offer. There have been many times when a home was in escrow but the buyer dropped out for various reasons. It's a great feeling for an agent to call our buyer and tell them that their back up offer is now in first place.
0 votes
Bill Cuppy, Agent, Huntington Beach, CA
Mon Oct 29, 2012
In theory, all offers are to be presented to the seller in a timely manner. The seller is to make a determination of whether to accept, reject, or counter the offer presented. This is all done in writing. If another offer has been accepted and the seller likes the content of your offer, your offer will be placed in a "back-up" position which means that if the original buyer does not complete the purchase, your offer will move to the primary position and you will open escrow and continue with the purchasing process.
Continuing your search while waiting for a decision from the seller would be the only prudent thing for you to do, as you are not the primary buyer for the other property. Even if your offer is accepted as a back-up, you should continue looking as you may not get the first home. If you find another home and make a successful offer to purchase, you should rescind your offer on the first home so there will not be an obligation to perform on your part.
If you have any other questions or concerns, feel free to contact me.
Bill Cuppy
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Mon Oct 29, 2012
All offers are to be presented to the seller within a timely manner whether it is a back up offer or not. If you feel your offer has not been presented you can ask for proof in writing it has or your agent has the right to present it themselves per the MLS rules.
There is a CAR form that you should present and have the seller sign in order to make you first back up in writing. If you find another house while you are waiting you just need your agent to send an official resend of offer.
Good luck.
0 votes
Cyndi Mino, Agent, Huntington Beach, CA
Mon Oct 29, 2012
Hi - Your agent is obligated to present your offer to the seller when it is received. Your agent will also find out where your backup offer is - in the top 5, top 25, etc. It really doesn't matter where you are in that backup line, as the next offer to be looked at will be the one most likely to be accepted - either highest priced, best financing, the cleanest offer, factors like this. There is a document that can be used to make your offer the next official offer to be in line upon the cancelling of the first buyer but a lot of sellers are reluctant to sign this.

If you find another home while you are waiting on your backup offer - great! Your agent will then notify the listing agent to remove your offer from the list.

If I can help you with anything else, just let me know.

Cyndi Mino
First Team Real Estate
0 votes
Shannon Jones, Agent, Seal Beach, CA
Mon Oct 29, 2012
A listing agent is obligated to present all offers to the seller -- even after an offer has been accepted. If there are no other backup offers, you may want to ask your agent to see if the seller will accept your offer as the official backup offer. That way, if the first offer falls through, the seller would move to your offer rather than putting the property back on the market. Some agents will just keep backup offers on file and then notify those buyers if the first buyer backs out. Regardless of which way that goes, you are certainly free to look at other homes in the meantime. And if you find a home, make an offer and have it accepted, your agent would then notify the listing agent of the first home that you are no longer interested.

Ideally, these are questions your Realtor should be able to answer for you. If you don't have a Realtor and need assistance, I'm happy to answer any additional questions.

Warm regards,

Shannon Jones
Keller Williams Realty
Web Reference:  http://www.ShowMeHome.com
0 votes
I'm not sure why the Realtor would hold the backup offer instead of presenting it to the seller. Realtors are obligated to present all offers in a timely manner -- ie right away -- regardless of what you are offering. If you're offering less than the list price and less than the current offer, the seller may not be very excited by your offer. But you are entitled to have your offer presented. And the seller is entitled to see the offer. The agent isn't supposed to be making that judgment call.
Flag Mon Oct 29, 2012
Thank you Shannon. My realtor has told me that they will hold the backup offer for a few weeks and if the first offer falls through, then they will present it to the seller. There are no other back up offers, and I'd like ours to be the first considered (before others are seen) since we are offering less than asking price.
Flag Mon Oct 29, 2012
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