Back up offers. In this market?

Originally posted on the Big Bear Real Estate Blog.

Accepted offer doesn't mean Sold House

In today's Real Estate Market nothing is certain.  Opening an escrow is just the beginning of the fun.  Escrows seem to be "falling out" almost as fast as they are opening up.

Will the property appraise?  Is the loan program a buyer qualified for last month still available?  Is the buyer serious and ready to purchase a property or were they just "fishing" to see how low they could get a seller down in their price? 

While these are just a few of the issues we are dealing with everyday in today's market, they definitely aren't the only ones.  With so many properties on the market, it seems like everyone has time to "keep looking" for that steal without worrying about missing out on the "one".

REOs falling out of Escrow

Having a large inventory of houses on the market also gives the buyer more properties to compare their potential purchase to and possibly second guess their offer.  This seems to be particularly true with Bank Owned Properties (REOs). 

A number of these Repos go into escrow, don't close and end up back on the market.  While there are many reasons for this happening as we discussed above, one reason that is most likely not the case is the pricing.  Most of these REOs are priced well and usually below the previous purchase price.  Because of that, these are sometimes some of the best deals on the market. 

With a large number of qualified buyers looking for their second home in the mountains, it is important to move quickly on these good buys.  There have been a number of well priced Bank Owned Properties come on the market in the past few months, that went into escrow right away.  A couple weeks later they fell out of escrow, were on the market for a couple days and went back into escrow with some lucky buyer.

Be smart not lucky

Being a Second Home Market, most of the buyers don't live in Big Bear and sometimes can't get up here quick enough to see these properties before an offer is accepted by the bank.  Timing is everything in Big Bear Real Estate. Some buyers plan a trip up here for months, and a great listing comes on the market the day after they leave.  Other buyer's come up here to get away from the city for a day and a well priced cabin comes on the market minutes before they walk in to a Real Estate office.

You might miss out on being the first offer accepted on these properties, but make sure you don't miss out on being the first offer accepted after the property falls out of escrow.  How do you do this? 

Write a Back up offer.  If a property is a great deal, chances are it will be getting multiple offers anyways.  Many times the person that doesn't win in the initial negotiations with the bank, just moves on to another property.  They don't consider telling the listing agent to keep their "second place" offer as a backup offer in case the accepted deal doesn't close. 

You can still look for another deal while your back offer awaits its chance to step in for a canceled escrow.  And if the escrow does fall out, you already have a head start on all the other buyers looking for a great deal.  Either way it can't hurt.

3 Bank Owned Properties to Consider Putting a Back Up Offer On

• 1362 Balsam- Listed at $399,900  Last sold for $550,000 8-16-06.  Log Style built in 2001.  Walking distance to Bear Mountain Ski Resort with views of the slopes from cabin.  Two car detached garage.
• 43427 Ridgecrest- Listed at $549,000  Last Sold for $730,000 8-2-05.  Log Style built in 1996.  Spectacular views of Big Bear Lake, Bear Mountain Ski Resort and the San Bernardino National Forest.
• 411 Oriole-Listed at $319,000  Last Sold for $459,500 8-22-05.  Charming Chalet Style cabin.  Walking distance to the lake and Meadow Park. Nice quiet street.