Back up Offer Closed - In this Real Estate Market Anything Can Happen - We Encourage our Sellers to keep showing their Property!

By
Real Estate Broker/Owner with F.C.Tucker 1st Team Real Estate

Just sold northwest indiana home by f.c.tuckerBack up offers in Real Estate - we've blogged about this topic before - we encourage them as

 

Sale Pending does NOT mean SOLD!

 

In this Market anything can happen, so we encourage the Sellers of our Listed properties in NW Indiana to keep showing their property to prospective buyers even after they have accepted an offer to purchase.

Just this week we Closed a Real Estate Transaction on a home for sale in NW Indiana that was the 2nd in line or back-up offer !

It's like an Insurance Policy to fall back on in case "something" unexpected happens along the 30 to 60 day road between what looks like a great offer "on paper" and the actual written words from the lender/underwriter stating something similar to "we are clear to close this transaction, all conditions have been met - please forward wiring instructions."

So when one of our listings gets an accepted offer we flag it in our MLS as PS which means : This is an active status. The Seller could accept back-up offers. PS-There is an accepted Purchase Agreement, yet the sellers wish the property to stay on the market.

A property is SOLD when the deed transfers hands by signatures at the closing table AFTER funding is verified and then is recorded into county records. So there is no SOLD signs ever on our listings :) It would not be an accurate representation to the public in our opinion.

Until this time we encourage all our sellers to Please Show!

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 F.C.Tucker Indiana's largest Real Estate Company Sincerely,

Jeff & Grace Safrin,  Broker / Owners                              Sign Up For Our Real Estate Newsletter

F.C.Tucker 1st Team Real Estate

13 Lincolnway Suite # 203 

Valparaiso, IN 46383         

Office # 219-309-9930

serving Lake, Porter, La Porte, Jasper, Newton & Starke Counties in NW Indiana

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Rainer
38,209
Cathy Polan
Royal LePage ProAlliance Realty,Brokerage - Trenton, ON
Royal Lepage Proalliance Realty Sales Rep.

I just had a back offer go through as well.  I love it because we had an offer on a home that was contigent upon us selling ours. 

Apr 11, 2010 01:38 AM #19
Rainmaker
335,096
Lori Churchill Cofer
Beasley Realty - Pullman, WA
Realtor - 509-330-0086 - Pullman, WA

What really gets me is when tha agents put up a pending sign immediately before the inspection process or worse yet a sold sign!  It really isn't in the sellers best interest at all...I have also attempted to schedule a showing for a home just under contract only to have both the seller and agent tell me they just don't want showings....go figure..

Apr 11, 2010 01:49 AM #20
Rainer
264,127
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

I'll always encourage my clients to write a back up offer on a short sale property they like, because it's very likely the original buyer will walk.

Apr 11, 2010 02:05 AM #21
Rainmaker
671,420
Christopher Watters
Watters International Realty - Austin, TX
Austin Realtor (512-829-8000)

I use the same practice. I always urge sellers to take a back-up offer. You never know what will happen these days!

Apr 11, 2010 02:36 AM #22
Rainmaker
1,015,587
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

You better believe it.  Ours will remain "Active with Contract", bring on the offers.  I had one exactly like you stated here.  You never know what can happen!   

Apr 11, 2010 04:25 AM #23
Rainmaker
180,011
Heather Fitzgerald
REALTY WORLD-Harbert Company, Inc. - Greenwood, IN
REALTOR Greenwood Indiana Real Estate

Grace,  I love our Active B for Active taking backups status.  It is beneficial to clients, and it sounds like it worked very well for your clients.  Great advice to them!

Apr 11, 2010 04:46 AM #24
Rainmaker
571,718
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Jeff,  As long as potential buyers are aware that there is  an accepted offer I don't hesitate to allow additinal showings.

Apr 11, 2010 07:43 AM #26
Rainmaker
314,035
Monique Combs
Royal Shell Real Estate - Bonita Springs, FL
Royal Shell Real Estate - Monique Combs

Great post! I agree and more so now with the bank requirements. As a listing agent, when I receive and offer, I write in the contract that all parties agree to keep the property in Active Status in the MlS until all contigenties are removed. This keeps the selling agent and buyers on top of things as well as protecting the seller in hopes of backup contracts.

Apr 11, 2010 11:25 AM #27
Rainer
164,155
Howard and Susan Meyers
The Hudson Company Winnetka and North Shore - Winnetka, IL

In representing a seller, having back-up offers is a wonderful thing.  It puts pressure to perform on the original buyer and provides a waiting list in case that original deal falls apart. 

However, for a buyer, I'm not so sure there is a benefit to being in the queue.  First of all, if the first deal falls apart, there may very well be a solid reason why...and even if disclosed, that may place the property in a "damaged goods" scenario which would not merit the previous price.  Secondly, if time has passed in the current market, there very well may be a different valuation based on price movement in the market or new competition. 

My recommendation to buying clients is to allow me to notify the listing agent that my buyer has a strong interest in the property and would like to be notified if the status changes, but not to formally write a back up offer. 

Of course, in some distressed sale circumstances, where there is a long list of ready, willing and able buyers, and there is a high probability that the original deal will fall apart, it may be a good idea to try to get to the top of the list.

Apr 11, 2010 12:17 PM #28
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

Hi Vicki - you are correct it is up to the sellers to decide - and many buyers do shy away from taking the chance on back up - but this one didn't and it did work out well for our sellers to not skip a beat and proceed to close with very little delay.

Hello Christine - you are right - no one wants any deal to fall - but that is not always the case nowadays.

Hi Barbara, your comment is so true and i was laughing when I read it as I've never heard "wanting the house rebuilt after the inspection" lol

Hi Missy - this was not a short sale transaction, but you are correct, unless buyers are counseled in advance about the longer response times in short sales, they tend to have less patience.

Congrats Catherine! A backup with a contingency - wow!

LOL Lori i I have a story to share that your comment reminds me of. Every week we drive by a home on the way to church on Sunday and i cannot tell you how many times in the past 4 months I've seen a sale pending go up and then come down and then a SOLD rider go up and then come down - now there is a rider that says REDUCED lol.

appreciates everyone time and input

sincerely,

grace

Apr 11, 2010 12:56 PM #29
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

Smart move Bill - we'd do the same if we are #2 spot :)

Hi Christopher - you can say that again - I'm sure we each have a story that could go into a book about deals gone south ( no pun intended on the "south" - Texas is on my list of places to visit someday :)

I like your MLS flag better Kevin - PS is not as clear as yours Acive with contract!

Active B  is also clearer flag on the MLS than ours Heather - many times we have to explain to agents scheduling appointments that the 1st offer cannot be bumped - and that a backup addendum must be used.

4 MLS systems Erica ?! wow, our one MLS covers 5 counties!

We confirm that with the buyers agent Bill so all parties are clear it's a showing for a backup offer only,

Wow Monique - never had it written in the offer -probably because our MLS rules for PS is so clear and as long as the seller agrees to continue to accommodate more showings we will keep working to get a back up in place if possible,

Hi Howard & Susan great points, however ,i would venture to say the BUYERS in our example may disagree with you, as they now have a home sweet home:)

appreciate everyone's take on this subject - it's been a learning experience!

sincerely,

grace

 

Apr 11, 2010 01:13 PM #30
Rainer
17,820
Iris Shamas
ITS Realty - Scottsdale, AZ

I agree, it is not a done deal until title changes and with short sales taking so long, that a backup offer has a good chance of closing.

Apr 11, 2010 11:39 PM #31
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

You are right Iris - and it doesn't have to be a short sale to take a backup offer either :)

sincerely,

grace

Apr 12, 2010 09:55 AM #32
Rainmaker
1,051,313
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

In our MLS the days on the market continues to grow so it is not worth it given the fact that most agent will not show a property that is BUP anyway.

Apr 16, 2010 09:14 AM #33
Rainmaker
1,051,313
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

In our MLS the days on the market continues to grow so it is not worth it given the fact that most agent will not show a property that is BUP anyway.

Apr 16, 2010 09:14 AM #34
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

Not all agents show them here either Bill - nor do they explain the status to their buyers, however we have found if a person really wants a home they will place a backup offer and so far 3 times in the last year the back up buyers became the homeowners !!!

thanks for stopping by,

sincerely,

grace

Apr 17, 2010 02:09 PM #35
Rainmaker
2,398,057
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

Our MLS rules say that once a contract is accepted the listing has to go pending within 24 hours and good luck on even a showing let alone a backup. I don't agree but the rules are the rules.

Apr 24, 2010 10:06 AM #36
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

wow Charles -  you may want to re-examime those rules that were written in times past where deals just about closed themselves LOL  .....in today's lending environment where anything can happen up and lending rules/conditions change daily making a sure thing not so sure anymore.

sincerely,

grace

Apr 26, 2010 04:16 AM #37
Rainmaker
511,053
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

Doing this very same thing on a property i have listed. The seller asked me why as we have an offer into the bank. My answer to her was things can go crazy at any time. We need to be prepared for the worst and hope for the best.

May 16, 2010 08:47 AM #38
Rainmaker
542,887
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN
SpousesSellingHousesTM

Great news Robert - we have another one going as well!

Sincerely,

Grace

May 25, 2010 09:51 AM #39
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