And should I make one, or accept one?

A backup offer is an offer that is negotiated like any other offer until the buyers and sellers reach a price and terms that are mutually acceptable. A unique term of the agreement is that it is accepted as a backup offer subject to the collapse of a previously accepted offer that is in primary position.

Backup offers are an much underused aspect of real estate negotiations. If you are looking for a home to purchase, you make a backup offer on a property that is currently under contract and continue looking. You simply make an offer and go through the negotiation process as if you are making the original offer. Once you and the seller agree on the terms, your backup contract sits in limbo until the original contract is closed or the deal falls through. The whole idea is to have an offer on the table should the original deal not work out for any reason.

For sellers, it’s a great tool for leverage. You never know when a deal could fall through. There are many reasons why contracts don’t close - financial matters, seller changes his mind, property conditions, unfavorable mortgage terms. If the deal does not close then the seller must continue marketing his home. A backup offer saves time and reassures you that your home is of interest to the market.

See Also

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