What Is a Backup Offer?
A backup offer comes into play after you’ve signed a contract to sell your house.
You’re under contract. You’ve agreed to sell your house to a specific party. We call the person (or persons) you sign the contract with the primary buyer.
A backup offer is another contract to sell your house to a different buyer, but only if the primary buyer doesn’t follow through on buying the house.
Should It Be Important to You as the Person Selling a House to Have a Backup Offer?
Is that a Good Strategy?
The answer, especially if you received multiple offers on your house, is yes, it is in your best interest to accept a backup offer.
As the person selling your house, you want to sell your house. So, if the primary buyer changes their mind, or they can’t get the financing, or they can’t reach an agreement about repairs, or whatever, having a backup offer as a signed contract means another person, who really wanted to buy your house, gets a chance to buy your house.
You don’t have to put it back on the market and have more showings, etc. There’s a contract already in place for a backup person to buy your house.
Plus, because you have a backup offer, you have more leverage when it comes to negotiating with the person buying your house. You both know that there’s someone else waiting in the wings to buy the house if they primary buyer ask for a repair you find unreasonable.
You Might Be Thinking, But If I Have Multiple Offers, Can’t I Just Go Back to Those Offers and Accept One of Those?
No, you can’t because offers have an expiration time and date. If you don’t accept them by that deadline, the offer is no longer valid.
Your agent could conceivably go back to all those people that made offers and see if they’re still interested. They may have already found another house. Or talked themselves out of wanting your house at all.
You’re better off having a backup offer signed and in place from the get-go rather than scrambling afterwards.
Caution: Backup Offers Buyers Can Change Their Mind
That’s not to say that the person on the backup agreement can’t change their mind. They can terminate the backup offer any time before being notified by you that they are now the primary buyer.
Still you’re better served having a backup offer in place than not.
You Can Have Multiple Backup Offers
You can have more than one backup offer.
The Georgia Association of Realtor forms provide for a number system so you know which backup offer is in 1st position behind the primary buyer. If the 1st backup falls through, then the 2nd backup can become the primary buyer. There’s no limit to the number of backup offers you can have.
Your Best Interest = Backup Offers
It’s important, and in your best interest, particularly if you have multiple offers, to accept a backup offer. Talk to your agent to make sure you’re on the same page when it comes to backup offers!