Is a backup offer a good idea? If you’ve searched for your next home for many months before coming to Sequim, and you go out with your Sequim Buyer’s Agent and look at 6 to 12 homes and find your ideal retirement home, you would be quite disappointed to find out your perfect home just sold. So the question you may ask your buyer’s agent is, “Should I make a backup offer?”
Sold – The Backup Offer
A backup offer can be submitted when there is an accepted offer in first place. If the backup offer is at least as good or better than the first offer, the seller will be inclined to accept your backup offer. If the buyer in first backs out or if the appraisal or underwriter kill the transaction, your backup offer automatically steps into first position.
The Backup Offer – Waiting Impatiently
A backup offer could be a waste of time, and 95% of the time, it would be. In Sequim sellers are not accepting offers unless the buyer is pre-qualified with a loan officer and has a good story about their job and their (retirement) income. The vast majority of buyers in Sequim are eminently qualified retirees, and very few transactions fall apart because they do not qualify for a loan. Not very many transactions fail because the appraisal didn’t come in high enough, and very few are killed by over eager loan underwriters.
The Backup Offer Timeline
A backup offer will require patience, because the first may play out for 30 to 60 days, depending on the closing date and contingencies in the contract. This means you might have to wait for a month or more before you find out if your backup offer dies a natural death or gets revived. It’s my experience that a backup offer only has about a 5% chance of closing. If you are lucky, and it does happen, you then have to apply for a loan and do your inspections and proceed toward closing.
Most of the time a backup would be a waste of time, but I had one this year that did move into first place, and it did close months later.
Last Updated on September 19, 2019 by Chuck Marunde