You’ve finally found the home of your dreams only to discover that your offer is one of many or worse yet, the house is already “Under Contract”. Welcome to today’s real estate market! However, all hope is not lost at this point because you can still put in an official backup offer. Let’s talk about a backup offer in detail.
First, let’s walk through how it actually works. As a Buyer, on a house already Under Contract, you put in an offer just like you normally would and negotiate until you reach terms and a signed contract with the Seller. If for any reason the first deal falls through, you’re now Under Contract on that home with the terms of your backup offer.
I know, it seems like a long shot, putting in an offer on a house that’s already Under Contract. However, keep in mind, there are many reasons that deals fall through. In today’s market Buyers are submitting multiple offers and that in itself increases the likelihood of a deal falling apart. If and when this happens, you are next in line and locked in with your backup offer and most importantly your backup offer keeps the home from going back on the market.
Locking in a home with a backup offer is especially critical in today’s competitive market with low inventory. Keeping this home from going back on the market prevents even more offers for you to compete with, which would basically set you back to square one.
As your Agent, I’ll be checking in off and on with the Listing Agent to see how the original deal is progressing. If a deal is going to fall through, it’s most likely to happen prior to the expiration of the due diligence timeframe or during the financial contingency period if the Buyer’s financing falls through.
Most importantly, you need to set realistic expectations when you put in a backup offer. A backup offer is the best way to put you next in line for the home, however chances are good that the first Buyer will close as scheduled. If the original deal does fall through, it’s important to know what happened—was there an issue with the Inspection, a problem with the financing or did the Buyer just have a change of heart? I’ll be able to offer insight into the “whys” since I’ve been keeping in touch with the Listing Agent.
Best of luck with your home search! Reach out to 404-862-8244 any time if you have questions as you begin the journey to home ownership.