Did you know that the average homebuyer makes around five offers before one is accepted? The housing market is very competitive, with listed houses getting multiple offers at once.
If you’re searching for a home, you might’ve come across your dream home, only to find out it already has an offer. Many potential homebuyers choose to accept the loss and keep on searching. However, you don’t need to do that.
A backup offer is a great way to become next in line on a home if the current offer falls through. This guide will discuss what a backup offer is and how you can use it to your advantage.
What Is a Backup Offer?
A real estate backup offer is a legally binding contract. It acknowledges that an existing offer has been accepted on the property. If the primary contract falls through, the seller will automatically go into contract with the second buyer.
The primary contract might fall through for various reasons. Some reasons might be financing issues or contingencies not getting met. It doesn’t hurt to put yourself in the position to be next in line on a deal for a home you love.
If the primary offer closes, you’ll get released from your contract. Any earnest money, or deposit, will also get returned to you.
A backup offer is similar to a regular one. A seller will consider and accept the offer just like they would with the primary one.
What Does Accepting Backup Offers Mean?
As you search for homes, you might see a listing that says “accepting backups.” That means that the best offer gets selected in a multiple offer situation. However, the seller won’t disregard other strong offers that are made.
If you’re one of the strong offers, the listing agent might call your agent and ask if you’d like to be a backup offer.
How Often Do Backup Offers Get Accepted?
Backup offers can be a longshot, but there are scenarios when they can get accepted. Many potential homebuyers get caught up in the homebuying process. They end up offering an amount that’s higher than they can qualify for, only for the loan to fall through later.
You can browse under contract home listings to look for homes to place a backup offer on. If you find a property you love, it doesn’t hurt to be next in line for it.
Can I Cancel a Backup Offer?
It’s sometimes not easy to back out of a backup offer. You might continue looking at homes while waiting to hear back about your backup offer. If you find another home that you like better than the first one, you might be in a difficult position.
Speak with your real estate agent about how to cancel a backup offer. While you might be able to get out of the contract, it might take a while to get your deposit back.
Use Backup Offers to Your Advantages as a Buyer
While making a backup offer doesn’t guarantee that you’ll get the home, it’s a great way to secure your place next in line. Speak with your real estate agent about the regulations surrounding backup offers, so you make an educated decision.
Did you find this article helpful? Explore our blog for other articles on the homebuying process.