Lisa and Jim's Northern Nevada Real Estate Blog: Northern Nevada Real Estate The Back Up Offer

Northern Nevada Real Estate The Back Up Offer

 
Northern Nevada Real Estate  
The Back Up Offer
Lisa Wetzel and Jim Valentine RE/MAX Realty Affiliates 
 

The Back Up Offer  

 

In an active market such as the one we are in, the Back Up offer is a good tool that can yield some unexpected positive results. Buyers these days often call to get information on a home for sale only to find that it already has an accepted offer on it. That can be frustrating, but not as frustrating as finding out later that the offer fell apart and you missed out on buying it a second time.

 

A Back Up offer can prevent such a missed opportunity by holding your position while you keep looking at other homes. The Back Up offer is made subject to the rights of the existing, or first, offer. Here is some sample language that is used in a Back Up offer, "Buyer is aware that Seller has an accepted offer on this property. This offer is accepted in a back up position subject to the rights of existing Buyer. Seller shall notify Buyer immediately should they move to primary position. Buyer may rescind at any time prior to notification that they have been placed in primary position by delivering written notice to Seller or Seller's agent of such rescission. If Buyer is placed in primary position the date of such notification shall be considered the acceptance date for purposes of this agreement." As you can see, you are able to look at other property while your position is held on the first property.

 

A Back Up helps the Seller as well as the Buyer. Often, when things get rocky in a transaction, all parties hope against hope that it will be saved. Time and financial concessions are made to keep it going, but were there another offer to move to the Seller would not be compelled to take the risk of extending a doomed escrow. This isn't to say a Seller shouldn't work with a Buyer that needs more time to get something done, rather to say that sometimes the Buyer isn't able to get done what needs to be done and in the end it is the Seller that loses.

 

Escrows fail for any number of unforeseen reasons. A surprise credit bump, a thoughtless appliance purchase, or a change in Federal or Lender policy can cause a loan to be declined. Buyers, Buyers' Agent, and the Listing Agent are all very surprised when this occurs as they didn't see it coming. As such, much effort is put in to giving the escrow CPR. If it is flatlined at that point a Back Up offer can be a wonderful thing for all but the Buyer that is at that point unable to perform.

 

One caveat with Back Up offers today is to understand the limits of the Listing Agent in a Short Sale situation. It is okay for the Seller to accept a Back Up offer, but neither the Agent nor the Seller should tell the Seller's Lender about the existence of a Back Up offer. If it interferes with the other offer there is possible exposure for interfering with the other party's contract. If the Short Sale negotiations break down by not coming to terms with the other Buyer then the Lender can be apprised of the other offer so the Seller doesn't lose their Short Sale process momentum.

 

Our Advice: If you find a home you really like take the time to write a Back Up offer. Many things can happen, even in a cash offer situation, that could enable you to buy the home. If you don't write an offer it is like the slot machine without a quarter in it ... you can't win if you don't play.

 

Extra steps are necessary in an active market. From finding the property, to making an offer, or Back Up offer, it takes work to prevail. Someone has to be the victor - it could be you with some effort!

When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!
 
Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts.

 

 

Contact them at  

carsonvalleyland@hotmail.com www.carsonvalleyland.com  

 

The Back Up Offer 

 



 
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Lisa Wetzel & Jim Valentine
 RE/MAX Realty Affiliates
1320 US Highway 395 N.
Gardnerville, Nevada 89410
775.781.5472 - Cell
775.783.6854 - Direct
775.552.8585 - Fax
 
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Comment balloon 0 commentsLisa Wetzel • February 08 2014 07:44AM

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