What Is A Backup Offer?
A Backup Offer is like First Runner Up in a beauty contest. You are first in line if the accepted buyer fails to complete the home purchase.
Why Are There Backup Offers?
If there is more than one interested party a seller has to commit to just one buyer for the duration of an escrow period.
There are a lot of reasons a buyer might not compete the home purchase and the wise seller wants a backup offer in case that happens.
What Are the Commitments In A Backup Offer?
The seller commits to price and terms should the backup offer become the primary offer. This is true even if the seller gets another offer for more money!
On the other hand, the backup buyer can cancel their backup offer at any time with a simple written notice.
It is an almost no-lose situation for the backup buyer.
Is There A Downside?
Your Great Uncle Milton might say that only chumps accept a backup position. He will tell you that your offer only exists to give the seller leverage against the primary buyer.
Your Great Uncle Milton is correct… but only a small percentage of the time.
A transaction can fall apart for a wide range of reasons and it is always better to be the secure backup buyer than to compete with the horde of other buyers.
The only reason to turn down the opportunity is if you need a clean break from this home in order to move on to something else.
How Do I Make A Backup Offer?
The most important thing to do is pick an experienced, local agent. Obviously, I think you should work with DIGGS!
The other thing to do is check out our Ultimate Buyer’s Guide and click the Make The Offer tab for more information about the offering process.