Years ago, my 4 year old and my 8 year old were bickering in the car while we were on vacation in Yosemite National Park … I was driving … and my Dad was with us. I stopped the car, and suggested that the two boys hop out, because the rest of us really didn’t want to hear any more of their shenanigans…. I pointed to a log where they could take their discussion, and pulled the car up a few feet, stopping behind some shrubs. We could see the boys, and we could hear their conversation. (They probably wondered if we would really leave them there … so quickly abandoned their adversarial position). The little one asked his brother “OK… what do we do?” Big brother shrugged. The little one continued ” Come on… tell me. You’ve always gotta have a plan.” (He was four!) They were ‘friends’ again … ready to get back in the car … enjoy the vacation (and each other). And we still smile, remembering the little one telling his brother that he should always have a plan.
In Real Estate… you need to have a plan. Having a back=up offer is PLAN B. I rarely take a back up offers on property I list for sale … but occasionally I do … if there’s a good reason.
Why would anyone take a back up offer? And then the next question would be “Why would anyone make one?” If you question whether or not a deal will close… having another offer sitting in the wings might be justified. Reasons for a real estate transaction falling through can be several. It could have to do with specific financing contingencies, appraisal, inspections, the lender, the loan approval process …or questions as to whether the buyer will have the resources to close within the alotted amount of time. While an offer or the terms might be sufficiently attractive to warrant giving the first buyer every opportunity … Plan B (B FOR BACK UP) protects the seller by having a second buyer in line, and therefore NOT having to start from scratch looking for a new prospect if or when that primary position buyer fails to come through. Plan B is a security blanket.
AS THE BUYER: Why put a BACK UP OFFER on a property already under contract? Why not just find another house… find your OWN house … one without another offer ahead of yours? Maybe the house (location, price, terms, amenities, upgrades) are better than anything else out there, and worth giving it a shot. The downside? You’ll have to sweat it out, until the first buyer fails to perform. (That wait can be torturous). The upside? You would be next in line, having negotiated out the terms you want (just like you would with any contract offer) … if /when that primary position buyer fell by the wayside, YOU’D get the house. What are the questions if you’re the buyer putting in a back up offer? Would you even want to put in an offer on a house that was already under contract with another buyer? Worth it? It all depends on the house, the situation, and you (and whether you can stomach the wait).
AS THE REALTOR, I can count on one hand the number of times I’ve taken back up offers. There’s no question but that it puts pressure on the first buyer to come through.
AS THE SELLER: Why would you take a back up offer? Why not just from scratch if the deal fell through? A back-up offer provides you with security. The first offer may be attractive enough for whatever reason… worth taking your property off the market for. It may be worth giving the first buyer (whose offer is likely very attractive for whatever reason) an opportunity to come through.
Those are personal decisions. But then again, there’s a lot about buying a house that is personal . Call us at 305 793-1365 or send us a note here . We love your referrals, and we look forward to assisting you whenever you are ready to buy, sell or move again.
