Should You Submit A Back-Up Offer?

What happens when the home of your dreams gets away from you? Let’s say you are looking at homes and you find the home of your dreams, but before you’re able to submit an offer, the sellers accept another offer and the home is under contract. What can you do? You may wonder if you can you submit an offer in the hopes to outbid the other buyer. The answer to this is unfortunately “no”. Because the seller is already in a legally binding agreement to sell to the buyer with the accepted offer, they cannot accept your offer (even if it is higher!)

The good news is, you can submit a back-up offer, though! A back-up offer is a fully executed sales contract that will go into effect should the first deal fall through. If the primary buyer changes their mind based upon inspection results, is unable to secure financing or the deal goes south for any reason, the back-up offer kicks in and the secondary buyer is now under contract. To be considered as a back-up offer, a couple of things need to happen:

If your back-up offer is accepted, it is important to be realistic and understand the primary contract will likely go all the way to closing. Additionally, your option fee is not refundable in the event the primary contract does make it to closing. However, the option fee is typically only .01% of the sales price. For a chance at the home of your dreams, it just might be worth it!