Top 3 Reasons to Write Back-up Offers
By Michelle Carr-Crowe, Your San Jose Saratoga Lynbrook Homes & Cupertino Schools Experts
I recently sold two different homes on the same day.
One of the properties was offered to the first back-up buyer (who declined), then was offered to the second back-up offer who accepted.
On the other property, an agent's clients want to write a back-up offer but she's never done one before and needed some coaching on how it works.
While many people consider back-up offers a waste of time (or the more cynical think it's just a way to ensure the accepted offer performs), I know of three different back-up offer buyers who succeeded in getting the home in the past year.
Two were my buyer clients!
The other was a buyer on one of my listings that I encouraged the agent to get his clients to commit to a back-up offer.
To help you and your clients, I've outlined the benefits to your clients of writing a backup offer.
The Top 3 Reasons to Write Back-Up Offers
•1) Your clients are in first position (or second position in some cases) to get the home (without competing or the home going back on the open market) and your terms are set from the time of backup acceptance. In a competitive market such as Cupertino with Monta Vista, Palo Alto with Gunn or San Jose with Lynbrook, positioning as back-up can help you snag the home if the first people back out.
•2) If there is any change in status you will be the first to know-this alone can make you a hero in your clients' eyes (even if they decline to move forward). Your clients have extra time to consider the purchase during the accepted parties' contingency period.
•3) Your client has more time to think about and research the property (have contractors make bids, etc., which can be a huge advantage with bank-owned and short sale properties), yet has no deposit on the line and can withdraw their back-up offer at any time.
As a listing agent, a written back-up offer from a committed buyer can help outweigh other negatives (e.g. clients with a lower down payment or an FHA loan).
Sure, you'll invest some extra time (if you already wrote an offer that lost out, you'll only need one more piece of paper-the backup addendum). Naturally, your offer may be used to keep pressure on the accepted offer to perform.
However, the advantages can definitely work in your Buyers' favor.
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