When buying or selling real estate, the property isn’t officially sold until the closing. A lot of times, sellers are advised to keep their options open by accepting backup offers. In short, a backup contract is one that would take the place of the original buyer should the deal fall through. Although not everyone loves backup offers, it is important to know about them in order to learn your options.
Oftentimes, sells fall through for different reasons. Perhaps the appraisal was not what was expected, or maybe the buyer did not get the financing needed. For whatever reason, having a sale fall through is quite inconvenient. In these cases, having backup offers could be a great safety-net.
Sellers cannot accept other contracts while one is active, but they can talk to other buyers and let them know that they are in a secondary position. A lot of times, this puts sellers in a stronger position and allows them to have more options if the original buyer backs out.
About 20% of sales fall through, and although it might seem like bad odds for buyers, sometimes putting in a backup offer can result in them getting the house. However, most of the times the original buyer will get the home. And if not, buyers who placed the backup offers might have to be very patient.
If you are planning on making backup offers or accepting them, it is crucial that you are guided properly through the process by a licensed real estate professional. In addition, having a lawyer help you out is also extremely recommended. This way, both sellers and buyers will be protected.
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