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 Dela Reviewx on August 10, 2010 - 2:06pm.
true, always backup just what I always do. Back up offers are definitely a great move. I used leave deals on the table without even bothering to have back up offers.
:-)
Submitted by skota keniks on April 11, 2011 - 6:11am.
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.logo design _ _ company logo design