What is a backup offer? I put an offer on a short sale over asking price but I have

Asked by Alicia, Monrovia, CA Fri May 30, 2008

not heard from the lender if I was accepted. I noticed the MLS went from active to backup offer overnight after 7 months on the market. There were multiple offers on the home and supposedly mine was the strongest. Does this mean my offer was accepted?

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Michael Barr…, Agent, Irvine, CA
Sat May 31, 2008
Hi there Alicia, It typically means that the Bank is has received an acceptable offer. You can have your agent contact the listing agent every 3 days for an update. Things move slow with the banks until they want to close then it can speed up.

It may mean yours but the lisitng agent should be able to let you know once they hear from the Bank

Best of Luck with it
Kind Regards
Michael Barron
First Team Real Estate
(714) 552-6817
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Sat May 31, 2008
Alicia:

If you made the short sale offer through a realtor, then you should have signed a form SSA - Short Sale Addendum. That form would have advised you in Paragraph E - Other Offers that "unless otherwise agreed in writing, Seller may continue to market the Property despite acceptance of Buyer's offer, and to present Short-Sale Lender(s) any additional offers that are received on the Property."

In response to this paragraph some listing agents actually leave the listing showing active on the MLS. By placing the listing in Backup Offer status, the listing agent on your property is leaving the property open for additional offers (which they will forward to the lender), but they are sending a signal to other realtors that there is an offer 'in the works' with the Short Sale Lender(s).

Have your realtor call the listing realtor for an update on the file, at least weekly. If you are the offer under consideration with the bank, the listing agent should at least disclose to your realtor if they have forwarded a better offer to the lender for approval. My experience as a Short-Sale Listing Agent is that once the bank starts working on any particular offer, they rarely look at the additional offers coming in unless they would result in a much higher return to the bank and this fact is usually called to their attention by the listing agent.

Good luck, have patience (some banks take 30 - 60 days to review a file) and make sure there is constant communication on the file. If you really like the house, stick in there for the closing.

I wish you success in your efforts to purchase your home and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes
Pacita Dimac…, Agent, Oakland, CA
Sat May 31, 2008
Depending on your local MLS rules, the status of the listing would be changed to "pending, show for back ups" or something similar if the homeowner/seller has accepted an offer, and is looking for other offers as back ups.

If this is a short sale, and the seller is open to looking at and receiving other offers, then the seller can accept subsequent offers as back ups...all offers are forwarded to the Lender who makes the final decision. No offer is really accepted until the lender accepts it.

So if your offer was accepted by the Seller as being in the primary position, the listing agent would change the status (in our local MLS, it's 24 hours from the acceptance by the seller). BUT remember that if another offer is stronger or better, in the opinion of the lender, the lender can choose to accept that offer instead.

Price alone doesn't dictate the strength of an offer. You should factor in the terms: large initial deposit, large down payment, shorter time to do inspections, all cash offer, no contingencies, no credits requested, AS IS purchase, etc. are all gauges of strength.

And how would you know your offer is the strongest? Who told you? Again, it's the lender who makes the final decision. It's not the seller or the listing agent.

Good luck!
0 votes
Sylvia Barry,…, Agent, Marin, CA
Sat May 31, 2008
When you said ;supposely yours is the strongest offer', what does that mean, is it, or is it not? Was there another offer that's stronger that came in? Has the L.A. called your Realtor and told him that yours is the one that's accepted?

The only way you will know is to call the listing agent and ask which offer is the one the bank finally accepted.

Our MLS is different from Cindi's. We have to change the status to contingent once an offer is accepted by the seller even if it is still waiting tfor bank approval. Don't ask me, but that's the rule here for now.

Have your Realtor call the Listing Agent and find out the true status. .

Best,
Sylvia
0 votes
The Hagley G…, Agent, Pleasanton, CA
Fri May 30, 2008
You did this through a Realtor, correct? As a listing agent, when I have a short sale and I receive offers, I keep the listing active until it is accepted by the bank. (I can do this because the seller has not signed the contract accepting the offer at this point.) I usually take back up offers until escrow closes - you never know what is going to happen in todays market. Your Realtor should be able to sdvise you.
Web Reference:  http://www.cindihagley.com
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