For more than a year, would-be homebuyers have needed to be more creative than ever to make their offers more attractive to sellers. The market dynamic is changing with interest rates going up, but buyers still need to look for every possible advantage.
The stock of available homes out there is still far lower than their demand, especially in the Pioneer Valley. With that in mind, you may find yourself making an offer on a home that already has qualified buyers bidding on it. This can be troublesome, but a backup offer will help you move toward your goal.
You've found the perfect property; however, the seller has accepted an offer. That would seem to be an open and shut case, and in some situations, it is. But in others, a backup offer can help you stay in the game.
As you make a backup offer, you acknowledge that another offer has already been made and accepted. However, you can have your offer considered first if anything happens to cancel the offer ahead of you.
When Is a Backup Offer Helpful?
Backup offers are usually not very helpful when your competitors are "cash in hand" buyers, such as real estate investors. But a backup offer can come through and make a difference in various other situations. They are especially useful in cases where the other buyer pulls out for their own reasons.
A backup offer takes the form of a formal written contract that should be overseen by your real estate agent. It is vital to protect your interests by designing your offer so you can withdraw without penalty if needed — for example if a home inspection turns up issues.
What Happens If the Original Offer Goes Through?
If the original offer on the property goes through, you'll get back any earnest money you placed into escrow as a potential buyer. You are released from any other obligations and can continue your home search as normal.
Can a Backup Offer Result in a Better Price?
In today's competitive market, a backup offer needs to be strong and offer incentive for the seller. In a slower market, it may be possible to save a few thousand dollars by making a backup offer below the asking price. This can also be appropriate if the home has been on the market for a long time and seems difficult to sell.
In most cases, a backup offer delivers very little risk and high potential rewards. Work with your real estate agent to develop a backup offer that meets your needs. It may just win the day, even if you weren't first in line to buy the home.
If you would like to begin your home search journey - feel free to reach out to our experienced Team of experts here at Jones Group Realtors.