When there is a shift in the market to a seller’s market there can be a frenzy to buy homes quickly before some one beats you to the punch. I have had my share of buyers that wanted to go see a house only to find out the house was sold in two hours. In this case I recommend to the buyer that if that house really meets their criteria we should go see it anyway and put in a back-up offer. Here is why I am suggesting this:
1) In a frenzied market buyers will throw caution to the wind and put in a full price offer or more just to tie up the property and prevent someone else from buying it. They may not even be sure this is the house they want so instead of passing on it they put it under contract to buy themselves sometime to think it over. Then when they decide it’s not for them or they come up against even the smallest of problems they terminate the contract. Investors have been using the tactic for years on fix and flip properties. I am seeing more and more deals fall part just like this and I have even had a few happen to me.
2) Lets say this scenario does happen, but the seller has a back up offer that is acceptable on the home. The minute deal number one dies, the buyers with deal number two are on deck. The listing agent calls the buying agent with the back up offer and asks them if they want to execute the contract and buy the home. In this scenario the seller loses very little time and the house goes back under contract with the process to start all over again.
Had people placed a back up offer on two homes that we had for sale like this in the last month they would have gotten the house both times. Sellers even though your house is under contract for a great price don’t stop showings. I know it says your home is under contract in the MLS, but you can also indicate you will accept showings and back up offers. You don’t know you just may need that back up offer.
Buyers even though your favorite house is under contract, go see it, put in a back-up offer you never know you just might get it. If you find a house you like better in the meantime you can always withdraw your back up offer.
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