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Health & Fitness

What is a Back Up Offer?

Liz Johnson, Realtor with Keller Williams Realty, explains what a back up offer is for buyers and for sellers in this changing real estate market.

With our local real estate market shifting from a Buyer’s Market to a Seller’s Market, many home buyers are finding that that they are having to write several offers just to buy ONE house and they are getting frustrated.  Sometimes the buyer will call the listing agent from the phone number on the sign wanting to make an appointment to see the home, only to find out it already has an accepted offer on it.  The great homes are generating multiple offers within the first few days on the market and a seller can only accept one of course.  Well, one in first position that is.

A great listing agent will ask the buyer or the buyer’s agent if that buyer would like to be in “Back Up” position and unfortunately, most home buyers don’t understand what that means for them.  Simply put, it just gives you, as the buyer, a sort of informal “right of first refusal” to that home, if it should come back on the market for whatever reason.

A home can end up back on the market because the buyer in first position decided not to proceed with the house based on the results of the home inspection, personal reasons, or due to financing issues.  If you are in as an official “Back Up Offer,” then before that listing agent puts the home back on the market, they have to give you the opportunity to perform on the contract.  You have the right at that point to say, “No thank you” and send over a one page rescission form.  You don’t have to put any money down to do this either!

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As someone who lists many homes for sale, I can honestly say I love having a back up offer because my sellers love having one as extra assurance that someone will buy their home.  It just takes a little bit of time to write up a back up offer and I’m always happy to do so for my buyers when it’s a house they really love.

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