Even if a seller accepts an offer from another buyer but the contract is contingent on the buyer selling his current home, the seller has the right to continue to market the home, RealEstate.com points out. A kick-out clause allows you to make an offer on a home already under contract. House sales fall through for various reasons. By making a backup offer, you could eventually move up to the top spot to buy the home you want.
Get home loan preapproval before making an offer. Presenting a letter of preapproval shows both the seller and the real estate agents involved that you are serious about making an offer and that you can qualify for financing.
Ask your real estate agent to submit a backup offer to the seller or the seller’s agent. This puts you next in line if the first offer the seller accepted falls through. But if other backup offers are ahead of you, the agreement should specify in which position your offer falls.
Make your offer attractive to the seller. For instance, the seller may be more inclined to accept a backup offer if you don’t attach numerous contingencies so that the deal can close more quickly.
Get down to a personal level. Ask your real estate agent to present a letter introducing you along with your offer. Telling the sellers just what features about their home you appreciate could put your offer in a more favorable light.
Include a backup contingency clause in the real estate purchase contract. Once you and the seller sign a backup offer contract, it becomes legally binding. Therefore, it’s important to make certain the agreement is worded the way you want. To start, the contingency should state that the sellers are accepting your backup offer and that the offer becomes invalid if the primary buyers close on the deal.
Specify a date in the real estate contract indicating when the first offer the sellers accepted must close. State in the contingency clause that the sellers must return your earnest money in full if the original offer doesn’t close by that date.
Request that the seller notify you in writing if your backup offer becomes the primary offer. Although real estate laws vary by state, in some cases, you also can obtain a release signed by the primary buyer in the event that buyer hasn’t satisfied all contingencies and the seller then accepts your backup offer.
- RealEstate.com: What Does Buying a House on Contingency Mean?
- HSH.com: Backup Offers Can Make Your Dream Home a Reality
- Counselors Title: Home Sale Contingency Summary
- First Team: 5 Facts Home Buyers Should Consider About Backup Offers
- Quicken Loans. "Backup Offer." Accessed March 4, 2020.
- Quicken Loans. "Contingency." Accessed March 4, 2020.
- Consumer Financial Protection Bureau. "What Is a Short Sale?" Accessed March 4, 2020.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.