A back-up offer is defined as when a seller accepts and signs a buyer's purchase offer, the first accepted offer becomes the primary contract. Here in Phoenix, finding a home you love but being informed the home is under contract is frustrating. Writing a back-up offer, submitted and signed by both parties, for a home you absolutely desire is recommended. Why? Because sometimes primary contracts fall through, and this puts you in position to purchase the house. Why do primary contracts fall through?  Financing Contingencies, appraisal too low, home inspections had too many issue. You should try to find out why the primary contract fell through. If the appraisal was not in line with the list price, you have to decide what your stance will be. If the issue was the Home Inspection, you should try to obtain a copy of the first buyer's report to ensure you and the seller can agree on concerns. If you accept back-up position, you do not have to stop your search for another home. Make sure there is an addendum to the contract that says you, the buyers, can withdraw at any time up until you are notified that the primary offer fell through, and your offer has been elevated to the primary position. Ensure the offer is one you would accept as if it were a primary offer. After agreeing to terms with a back-up, you cannot change the terms if the primary contract falls through. The home will not go back on the market, it will go to the back-up buyer. This is beneficial to both parties. The buyer gets the home they want, and the seller does not have to find another buyer. If you do not like a potential back-up offer because it is too low, or the contingencies are too much, you may be better off not countering the offer for back-up position.

What is a Back-Up Offer? Phoenix Real Estate

What is a back-up offer and is submitting one a good idea?

A back-up offer is defined as when a seller accepts and signs a buyer’s purchase offer, the first accepted offer becomes the primary contract. Here in Phoenix, finding a home you love but being informed the home is under contract is frustrating. Writing a back-up offer, submitted and signed by both parties, for a home you absolutely desire is recommended. Why? Because sometimes primary contracts fall through, and this puts you in position to purchase the house.

Why do primary contracts fall through?

  •  Financing Contingencies.  You lost your job, you bought a new car before the house closed.
  • The appraisal. The property does not appraise for the contract price. The buyer wants the seller to drop the price, seller refuses, and the buyer walks away.
  • The Home Inspection. Buyer and Seller cannot agree on the amount of repairs or concessions.

You should try to find out why the primary contract fell through. If the appraisal was not in line with the list price, you have to decide what your stance will be. If the issue was the Home Inspection, you should try to obtain a copy of the first buyer’s report to ensure you and the seller can agree on concerns.

If you accept back-up position, you do not have to stop your search for another home. Make sure there is an addendum to the contract that says you, the buyers, can withdraw at any time up until you are notified that the primary offer fell through, and your offer has been elevated to the primary position.

What should you think about if you are the seller?
Ensure the offer is one you would accept as if it were a primary offer. After agreeing to terms with a back-up, you cannot change the terms if the primary contract falls through. The home will not go back on the market, it will go to the back-up buyer. This is beneficial to both parties. The buyer gets the home they want, and the seller does not have to find another buyer.

If you do not like a potential back-up offer because it is too low, or the contingencies are too much, you may be better off not countering the offer for back-up position.Declaration

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