By Sean Patrick O'Feery, January 20, 2021
First- What is “Back-Up?”
Back-up is the term, often used by Realtors, to describe a second position buyer. If there is more than one offer on a home, a seller may choose to offer the people in second position “the back-up position” so that seller does not need to go back to the market if the first position offer does not work out. Sellers often like to avoid the process of going back to market; making space for new people to see the home and a the paperwork associated with a second round of offers can be inconvenient and time consuming.
As a buyer, it is hard to hear that your offer was not accepted. Most of us move into a home in our minds before our offer is accepted. Coming in second place in a multiple offer situation can have a real silver lining though. The back-up agreement is basically like having a first right of refusal if the buyer in first position chooses to back out.
It seems counter intuitive that in this strong sellers market, buyers are backing out of sales more than ever, but it is happening. It may be because of the high level of competition required to just get your offer accepted and have the opportunity to take a further look at a home. Once a buyer has an offer accepted, there can be a moment after the competition is over and you look a little further, that gives pause. There isn’t a lot of time to think things through thoroughly in this competitive market. This is making the back up position more valuable than ever.
My wonderful, experienced client Kate, who just got the keys to her new home yesterday, is a perfect example. We had made, and been turned down on, two offers and were prepping for a third when we got a call back from the agent from the second home. The buyers had backed out and we were being called up from the “Back-Up position.” Because the seller had one buyer back out, they seemed to be appreciative of our offer. We had some very reasonable negotiations around inspections and the sellers repaired an expensive sewer line. Now, because we were willing to take “back-up,” Kate is moving in to her new home!
Hang in there buyers and don’t hesitate to accept that second place prize of “Back-Up.” It is more valuable than ever before!
If you are looking for a buyers agent that is always looking out for you, give me a call!
Earth Advantage & ADU Specialist Broker