Imagine that You've been looking for a house for a while before finding it. But the issue is that it has a contract in place with another buyer. But according to your real estate agent, there is still hope. Enter the offer of a backup. However, what precisely is the backup offer, and is it worthwhile to hold out for a house that has already been claimed?
Understanding how it functions in detail is helpful. Like a buyer, you make an offer on a home that is under contract just as you would if you were the first person to express interest. You and the seller will then negotiate until an agreement is reached. You are the next person in line to purchase the house if the initial contract falls through for whatever reason.
To get legal advice & help with buying a new house, you can contact Deo Volente Solicitors at +44 1234 350244 or visit dvsolicitors.com to learn more. Our expert legal advisors are here to help you anytime.
While this may seem far-fetched, it will likely give you a home where you can commit to a house which is already under contract. There are different reasons for trading, so if you have savings, you lock things in and prevent the house from returning to the market.
From a seller's point of view, an aftermarket product can provide peace of mind and strength. If at any point the seller feels the buyer with the currently accepted offer is being difficult or does not have the funds to purchase the property, then they know the backup offer is there.
Of course, going beyond the demanded amount will get the seller's attention, but there are other ways to make your backup offer appear alluring. Did you especially like something about the house or the neighbourhood? Tell the homeowner.
Your agent should communicate often with the listing agent during this period to maintain track of the situation and to show how serious you are about stepping in if necessary.
A backup offer usually calls for a good faith or earnest money deposit, which will be reimbursed if the initial bidder closes on the property.
In reality, a backup offer may have the effect of pressuring the initial buyer to close as soon as possible and perhaps ignore minor concerns since they understand that the seller has little incentive to be flexible because a second bidder is waiting in the wings.
Don't assume you're out of the woods if the initial bid on the house fails. While the initial buyer's troubles (such as a lack of finance) may have caused the deal to fall through, it's more probable that those purchasers discovered flaws during the house inspection, such as a defective foundation or leaking roof.
To find any issues you don't want to deal with, conduct your due diligence (and house inspection). If so, you can walk away from the purchase (with your deposit) with no harm done as long as the contract contains a clause requiring a house inspection.
If you’re looking to put an offer on a house that is already in contract, please don’t hesitate to visit our residential property page or contact one of our well-experienced solicitors on tel:01234350244.