It’s a common occurrence in today’s residential real estate marketplace: you begin your search for a new home to purchase, you go on tours of properties that pique your interest, and from that experience, you decide that you’ve discovered your dream home—only to find out that an offer has been placed and accepted by its current owner. To be certain, it’s a frustrating situation to find yourself in. But rather than immediately give up hope, you’d be wise to consider making an offer of your own.
In the real estate industry, we refer to such offers as “backup offers”—offers that sellers accept as contingency plans in case original offers fall through. While fielding backup offers is business as usual for seasoned real estate agents, knowing when and how to make one depends on many factors. Here are some pieces of advice to consider if you’re interested in a listing whose first offer has already been accepted.
If you love it, it’s worth it.
There’s really nothing worse than regret—especially when it comes to the perfect place to call home. If you feel that you’ve found yours, you should certainly place a backup offer. If all goes as planned with the initial offer, you’ll have to find another home, but at least you’ll know with 100% certainty that you did not miss an opportunity. If the initial offer falls through at any stage, then the home will be yours.
Don’t stop your search.
Placing a backup offer on your dream home is a particularly wise option if you’re not necessarily in a hurry to buy. If you’ve found the home that you really and truly want, you should at least try to make it yours! Meanwhile, nothing is stopping you from continuing your search.
Be mindful of the potential buyer who placed the accepted offer.
It’s not unusual for a backup offer to motivate the buyer who placed the current accepted offer to up the ante and get competitive. If that party is intent on completing the purchase of their dream home as planned, your backup offer just might commence a bidding war. Having a seasoned real estate professional handle these dealings will mean that you proceed in the most advantageous way—one that doesn’t result in a contentious experience.
Know the rules.
Even though it’s merely an option, there for the property’s current owner to consider in the event that “plan A” falls through at any point, a backup offer is a legally binding contract. It works the same way that any other offer would, in that you’ll need to put earnest money into escrow, where it may remain for an extended period of time. Further, if the first offer falls through, you will be legally obligated to proceed with the purchase of the home (assuming that financing does not fall through for you as well).
As such, before you make a backup offer, you’ll want to be absolutely certain of two things: one, that you’re willing and able to pay the price that you agreed on, and two, that having your earnest money tied up in escrow won’t put you under any financial strain. As is the case with any formal real estate agreement, it’s highly advisable to proceed with the counsel of a trusted agent who’s experienced in dealing with these matters. Contact First Team Real Estate today to find the right real estate agent to help you get your offer accepted.