Best Strategy: Write a Backup Offer?

You see a home you like online. You contact your Realtor® and you view the home.  You fall in love.  It has everything you are looking for.  You write the offer and you wait patiently for a response.  After two days of waiting, you find out that you were outbid by another buyer.  Your heart sinks in disappointment and not sure what to do next but to move on.  But there is another option.  You can go into backup position if both you and the Seller agree on the price and terms.

Why is it worth your while to write a backup offer?  Here are three reasons:

1. Because you never know: There are at least five contingencies (assuming a loan is involved) for the buyer to release before it is a done deal.  This means that the home could fall out for a number of reasons and if you are in the first position for a backup offer at that time, then it automatically gives you first right of refusal once it falls out.  That means no bidding war, no renegotiations.
2. If you get into escrow, then sometimes you have more negotiating power:  No Seller wants their home to fall out of escrow, let alone twice.  If you jump in, you are more likely to have more leverage when negotiating after inspections for bona fide credits or a price reduction because the Seller wants to be done with the home.
3. Because it is free to do:  It does not cost you a penny to be in backup position, so why not?  It is worth the time to do get it done.  Low risk for high reward.

Last year I represented a buyer who agreed to put in a backup offer.  Not only did it fall out and my clients got the home, but I found out from the Listing Agent that if we hadn’t had that backup offer signed, then we never would have had the property because there were others who offered more.  But none of them had the form signed so they missed out.  My clients  got their dream home.

Keep in mind the proper forms have to be signed in order to make it official.  Don’t take “oh, the agent said we are next in line” for an answer.  Get the proper forms signed off and don’t let anyone tell you otherwise.