The Importance of A Back-Up CONTRACT in a Competitive Market
In today's real estate market, competition is fierce. Buyers are often up against multiple offers for the best properties, which means securing your dream home can be challenging. However, even if your initial offer isn't accepted, there's still a chance you can buy the property by turning your unaccepted offer into a back-up contract. This strategy can put you in a prime position to step in if the primary deal falls through. Here are the top five things our team does to put our buyers in the best back-up position possible.
1. Say “YES” to Being a Back-Up Immediately
As soon as you find out the seller has chosen another buyer, have your agent reach out to the listing agent immediately. Find out what terms the seller will accept as a back-up contract. Quick action is crucial because it shows the seller you are serious and ready to move forward if the primary contract fails.
2. Create a Winning Back-Up Offer
Have your agent determine why your initial offer wasn't accepted and what would have made the seller say yes. Revise your original offer with these improved terms and send it to the seller as soon as possible. Don’t wait for the listing agent to counter your previous offer. Ensure your offer includes a "Back-Up Contingency Agreement" and a special stipulation that your due diligence period starts when the seller signs your back-up contract, not when you become the primary buyer.
3. Submit Your Back-Up Offer Promptly
Ideally, you should submit your back-up offer no later than a day after the primary buyer goes under contract. Remember, other buyers might also be interested in submitting a back-up offer, so speed is essential. The faster you submit an offer that the seller can sign, the better your chances of securing the back-up position.
4. Do Your Due Diligence
Once you’re under contract as a back-up buyer, have your agent stay in close contact with the listing agent. Find out when the primary buyer’s inspection is and ask if you can get a copy of the inspection report. Also, ask how confident the listing agent is that the primary buyer will close. If there’s any doubt, start doing your own inspections and loan approval processes. Treat this as if it’s already your house to ensure you are prepared to move quickly if the primary buyer backs out.
5. Revise Your Back-Up Contract to Remove Seller-Risk
If the listing agent is not fully confident in the primary buyer, start treating the situation as if you are the primary buyer. Complete your inspections and loan approvals, and be prepared to accept the property in as-is condition. You might even consider removing your due diligence period and any seller-paid closing costs from your back-up contract. This makes you a more attractive and straightforward buyer, ready to step in without causing the seller additional hassle.
The Bottom Line
In this competitive market, buyers are still vying for the best properties, even with inventory starting to stack up. If you want to maximize your chances of securing a property, putting in a strong back-up offer is a strategic move. Show the seller that you are a serious and hassle-free buyer who can seamlessly take over if the primary deal falls through.
At The Rob Smith Team, we are keenly adept at deploying smart strategies to help buyers get where they want to be. We understand the intricacies of the market and know how to position our clients effectively. Our expertise often leads to success in securing properties for our buyers, even if they are already under contract with another buyer.
If you have any questions or need further guidance, don't hesitate to reach out to us at info@robsmith.com or call or text 404-906-5857. We're here to help you navigate the complexities of the real estate market and secure your dream home.
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