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Contingent - Accepting Backup Offers
If you're searching for homes online you'll notice a lot of listings have their status set as "Accepting Backup Offers", but what does accepting backup offers mean? Can the sellers accept a new offer if it is for more money than the current offer? What is the point of a backup offer? Are the sellers expecting the current accepted offer to fall apart?
Continue reading to find out the answers to these questions and learn what it means when a home's status is "Accepting Backup Offers".
What is a backup offer?
When a seller puts their home on the market and accepts an offer it can be very exciting, but there's still no guarantee that it will actually sell. That's where backup offers come into play.
A backup offer acknowledges an existing accepted offer (offer #1), and ensures a contract with the seller should offer #1 not be completed. The backup offer can be held in position #2 until offer #1 either closes the deal, or is terminated with a mutual release from the contract. Only if offer #1 completes a mutual release will a back up offer be able to move forward with the purchase agreement.
Are backup offers a waste of time?
In my opinion a backup offer is not a waste of time (unless you're a now buyer with limited time to find a home). There is always a chance an accepted offer won't work out, and when they don't work out, a backup offer will save time versus putting the home back on the market and starting the process over.
There are endless reasons an accepted offer could fall apart. Over the past 11 years I have encountered the following scenarios which resulted in backup offers being used, or homes without backup offers going back on the market..
Again there are many other reasons a deal can fall apart. The above scenarios are just a few that I have personally experienced. It is always in the seller's best interest to have a backup offer whenever possible, especially with how busy our market currently is.
With homes selling as fast as they are it is forcing buyers to make quick decisions. It's easy to get excited and offer more money than you would have if you had more time to think it over. If buyer's remorse kicks in the seller will be glad they have a backup offer ready to move to position #1 right away.
Kirby Parker has lived in West Lafayette since 2001 and has been selling residential real estate at Keller Williams Realty for the last 12 years.