When there is a shift in the market to a seller’s market, there can be a frenzy to buy homes quickly before someone beats you to the punch. I have had my share of buyers that wanted to see a house only to find out that 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 right away 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 that this is the house they want so instead of passing on it, they put it under contract to buy themselves some time to think it over. Then when they decide that it’s not for them or they come upon the smallest of problems, they terminate the contract. Investors have been using this tactic for years on fix and flip properties. I am seeing more and more deals fall apart just like this and I have even had a few happen to me.
2) Let’s say that this scenario does happen, but the seller has a back up offer that is acceptable for 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 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 that you will accept showings and back up offers. You never 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, you can always withdraw your back up offer.
