Special offer

Let's talk about "back-up" offers as a strategy.

By
Real Estate Broker/Owner CA#01772851 HI#RB21268

Here is the scenario:

I received a back-up offer yesterday - one that was knowingly submitted as one - on a new listing of mine. Agents and their clients have been all over it but, after 24 hours, no offers had come in yet.

In the meantime, a prospective buyer contacted me, I showed them the home, and we wrote up an offer. The offer was just what my client, the seller, was looking for and signed it.

And, of course, I made the change on the MLS to reflect that.

Since there were still some "contingencies", it shows up as "back-up" rather than "pending".

It wasn't an hour later when the first call came in and asked if I took "backup" offers, and I assured her that we do.

Well, when it came in it was NOTHING like the one the seller had just accepted. This offer was one that MAYBE might be accepted if the home had been on the market for a long time and no other offers eminent.

That got me to thinking:

Is it this agent's strategy to sneak in this "backup" offer which then would become a fully accepted offer in case the first buyer pulled out for some reason?

Because the seller still has to accept the back-up offer as such, because it would automatically take the place of the original offer.

So here is my advice to my sellers:

Absolutely do not accept a backup offer unless it is everything you want.

Treat a back-up exactly as if it were your FIRST offer.

 

 

Posted by

Hella Rothwell at Carmel Beach during Concours WeekCarmel-by-the-Sea Beach and Pebble Beach Golf Course California

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Member: National Association of REALTORS, California Association of REALTORS, Hawaii Association of REALTORS, Del Norte Association of REALTORS, Honolulu Board of REALTORS. Also MLS Listings in California.

 ________________________________________________________________

Hella Mitschke Rothwell (R)

Real Estate Broker/Owner/Realtor®
Licensed in California #01772851 & Hawaii #RB-21268

Tel. 831-626-4000 

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Comments (9)

Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Here, in WI a seller can accept multiple secondaries, and so not just one automatically moves into primary

Jul 23, 2017 07:43 AM
Hella M. Rothwell, Broker/Realtor®

But "secondaries" don't have the commitment that a "back-up" has? I don't understand how that works. Or do you just choose the best of the secondaries? What if a better offer comes? What is the advantage of a back-up then if you don't have a definite place ie. 1st backup, 2nd backup, etc.

Jul 23, 2017 01:27 PM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Wow, I have never heard of that before, I would think that only if it was a acceptable offer to the seller unless I am reading this wrong.

Jul 23, 2017 08:01 AM
Hella M. Rothwell, Broker/Realtor®

You read this correctly, the seller still needs to accept it AS IF IT IS THE FIRST OFFER, it's only in 2nd place if the first one falls apart. But what if you get a BETTER offer in than Backup #1? The seller needs to break the contract with BAckup #1 which could have legal consequences.

Jul 23, 2017 01:29 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Excellent advice, Hella. I don't often see back up offers, but when I do they are usually as good if not better than the original which is what induces a seller to accept one.

Jul 23, 2017 08:08 AM
Hella M. Rothwell, Broker/Realtor®

Exactly! And to keep that buyer (possibly) on the hook.

Jul 23, 2017 01:30 PM
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

We just don't see backup offers here, although I sure would like to have one on every listing, of course.  ;-)  Good advice for sellers!

Jul 23, 2017 10:30 AM
Hella M. Rothwell, Broker/Realtor®

That's fine if the initial offer looks weak and you get a better offer. In fact, then you might even hope that the first offer falls apart. But what if you sign that one up and an even better one comes along?

Jul 23, 2017 01:32 PM
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Very sage advice, Hella. Sellers need to understand that by signing a back-up offer, they can't put the property back on the market if the first trasaction falls apart.

Jul 23, 2017 11:01 AM
Hella M. Rothwell, Broker/Realtor®

Which is also its advantage if the back-up offer is strong and the buyer is willing to take a chance and wait.

Jul 23, 2017 01:33 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Hella, my buyer won a back-up offer, and yes, it had to be full price or they would not take it.  

Jul 23, 2017 01:48 PM
Hella M. Rothwell, Broker/Realtor®

Even a full price offer might not be enough for a back-up, but at least it has a shot.

Jul 24, 2017 05:33 PM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Absolutely don't take a unacceptable back up offer!! Holy smokes I can't imagine a seller agreeing to another offer that he/she didn't like or want in case the 1st went away.

Jul 23, 2017 02:33 PM
Hella M. Rothwell, Broker/Realtor®

You would think that the agent would know that if the seller accepted an offer so fast, it was a really good one. And then to come in with a crappy one as back-up? But I guess agents do what their client wants.

Jul 24, 2017 05:31 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

The only reason for a backup is to prevent a back-on-market, so it better be as good as the existing offer or better. Otherwise, no reason to take it.

Jul 24, 2017 05:07 PM
Hella M. Rothwell, Broker/Realtor®

Absolutely. And then it might keep your current buyer from going weird knowing there is someone willing to take their place, maybe one with an even better offer.

Jul 24, 2017 05:28 PM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

On my listings, i do not accept back up offers, i do keep them close if something happens, but so right unless it is perfect Hella M. Rothwell, Broker/Realtor® 

Aug 24, 2017 06:29 AM