The beauty of backup offers
The Wheel Estate Cam: Episode 15
By Frank Borges LLosa, Friday, March 12, 2010.
Episode 15: Real estate broker Frank LLosa, in this latest edition of The Wheel Estate Cam, says backup offers can be a win-win for buyers, sellers and agents.
These days, with so many pending transactions falling apart, backup offers can help to seal the deal. Backup offers may incentivize the buyer who made the first offer to be more aggressive and agreeable to terms in closing a sale, and they can also get other buyers' feet in the door in the event a previous sale fails to close.
Prospective buyers who place backup offers may even be able to grab a property on better terms than the initial offer, he noted.
"I know that clients love it when (listing agents) continue to market a property when it's under contract, because it's in their best interest," LLosa said. Comments are welcome below.
Watch past episodes of the Wheel Estate Cam.
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Submitted by Richard Johnston on March 12, 2010 - 4:44pm.
Frank,
First, if the seller still wants the home to sit on the market even when they have accepted an offer means that agents will still be showing the home and writing offers.
If they already have a solid buyer, why continue to market the home?
Plus, what real estate agent wants to show a home which has already been sold? Listing agent's who lable a home as "backup" are asking for backup offers to solidify the first.
But in certain situations, the first offer may have additional contingencies or complication or maybe the listing agent feels the buyer might not hang and want's backup.
Regardless, this situation has pro's and con's on both sides. Every home is in a unique situation.
Sincerely,
Richard M. Johnston, GRI, ABR, e-Pro
RE/MAX OTB ESTATES
BANK OWNED SPECIALIST - REO
818-730-4128 Direct (Mobile/Text-SMS)
http://www.estates.la
Submitted by Chris Somers on March 14, 2010 - 9:19am.
Back-up offers are a win-win indded, but I do agree with the above. When I represent a buyer, I certainly do not want to show properties where there is an accepted offer as it is a waste of my time and my clients time. Further, if they fall in love with a home, they may be waiting for a deal to fall apart that never does. However, it is important to keep them on your radar screen. On the listing side, we keep all of the info of past inquiries and write down names and numbers and keep all the info. Should the deal not go through we have more people to follow-up with. I guess it depends on your market and whether the listing is a short sale or not where many buyers back out to not wanting to wait around for the final approval.
Submitted by Peter C. Fyler on March 16, 2010 - 5:36am.
Hi Frank,
I agree that the decision to make a back up offer is a catch 22 --- damned if you do and damned if you don't kind of gamble. If buyer #1 knows there is a BU offer from at least one other buyer, it most likely will incentivize buyer #1 to be more agreeable and less demanding during the satisfaction of the contingencies phase. However, if buyer #2 is unwilling to make a BU offer, he has no place at the table should #1 fall out. I have a situation like this right now. Even though my client buyer really wants the property he has decided not to make a BU offer. Therefore, all I could do is beseech the listing broker to call me immediately should buyer #1fall out. Of course, this is assuming no one else comes forward in the meantime to place a BU offer. It's a gamble no matter what.
Peter C. Fyler, CRS, REALTOR®
SplitRock Real Estate, LLC
Exclusively Representing Buyers
Martha's Vineyard, Massachusetts
BuyersOnly@SplitRockRE.com
http://www.SplitRockRE.com
Submitted by Neil BITZEL on April 19, 2010 - 7:56pm.
Sellers and Agents, not only in real estate field but also in kind of fields are always winners. Because they will never loose, only the buyer becomes the ultimate looser.
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Submitted by Shelena EDLER on April 21, 2010 - 8:49pm.
Almost all the real estate companies are providing back-up offers to their customers to seal their deals.
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Submitted by Marvyn GAHLMAN on April 24, 2010 - 12:13am.
Back up offers provide big persuasion for the buyer towards in buying the real estate property they are interested in. It is good marketing strategy in real estate businesses.
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Submitted by Norris MARTINETTI on April 25, 2010 - 10:17am.
In real estate deals, since the the transactions are very high some incentives will have to given away to buyers in order to get the businesses done. That is where back-up offers are playing a major role.
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Submitted by Tanesha GULLION on April 28, 2010 - 9:12am.
Offering some kind of incentive to buyers will make sure that the deal is going to happen, that is necessary thing in any sort of marketing.
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Submitted by Corynn SURETTE on May 2, 2010 - 12:41am.
Since almost all the real estate agents and companies providing so many various offers with their businesses, buyers will get confused what to choose.
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Submitted by cChristina susan on May 7, 2010 - 4:47am.
it most likely will incentivize buyer #1 to be more agreeable and less demanding during the satisfaction of the contingencies phase. However, if buyer #2 is unwilling to make a BU offer, he has no place at the table should #1 fall out. I have a situation like this right now. Even though my client buyer really wants the property he has decided not to make a BU offer.World Class Manufacturing
Submitted by Dorothea clay on May 8, 2010 - 9:14pm.
Giving out a back up offer will not merely do the deal. Real estate agents have to be extremely creative in giving out a back up offer. Otherwise it won't make any sense.
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Submitted by Molly MEMBRENO on May 11, 2010 - 7:03am.
It is becoming some what difficult to give out back up offers in the present. There is a high competition for that as well.
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Submitted by Domina Richardson on May 11, 2010 - 6:37pm.
I am always looking for offers on things for my house. I am constantly remodeling and am always looking for deals on supplies. Does anyone know of anything that you think might help me out? Programmable Thermostat
Submitted by Christabel GENEST on May 11, 2010 - 10:24pm.
Sometime these offers often considered as traps in most cases. So buyer do keep a close eye about what is going on behind the scenes.
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Submitted by Narcissa BUSCHUR on May 14, 2010 - 7:51am.
Buyers are always aware of the fraudulent back up offers. So we have to make sure that the back up offer will not be identified as such one.
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Submitted by Kacey TISH on May 15, 2010 - 7:58am.
A nice and attractive back up offer can seal the deal between the real estate agent and the buyer. But agent has to be extremely creative in giving out an offer.
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Submitted by Todd Cook on June 16, 2010 - 4:46pm.
Back up offers can be the gift and the curse. I often refer to them as the catch 22. I understand the premise, but the client should always come first and everything else will fall into place. The couple times I have tried using the 'back-up' method I got burnt harder than you can believe. If it works it's great, otherwise it can sometimes completely back fire on you. Thanks for the insights.
Submitted by Liza Morgan on June 29, 2010 - 1:35pm.
Thanks for the great video. We really love to learn more about these offers and I think we can all learn from other people.
Thanks Liza Morgan
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Submitted by Merideth Sevick on June 29, 2010 - 4:01pm.
Thank you for this great article and the video that comes along with it. This is a great site and I really enjoyed visiting it.
Thanks Merideth,
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