Curt Darragh : The Art of The Back Up Offer

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The Art of The Back Up Offer

By: Curt Darragh
Thursday, May 01, 2008 11:31 PM

Most of my business these days are REO properties and I keep seeing a re-occuring theme. Other agents can't seem to get their buyers to put in back up offers once the bank accepts an offer. It's my experience that the first offer typically falls through. We usually end up closing with the second, third and sometimes fourth buyer. No matter how many times I tell the other agents to put a back up offer, they either don't listen or can't get their buyers to pull the trigger. Then when the first deal falls through, instead of having the first back up offer in place for the bank to respond to, they end up in a bidding war. Now I'm not complaining about having multiple offers, but the agents all seem to get mad... ."why didn't you tell me there were other offers!". BECAUSE THERE WEREN'T ANY UNTIL IT WENT BACK TO ACTIVE!!!!!! If you would just put that back up offer in, you would be in first place when it went back to active and possibly get an accepted offer before any other offers come in. So please put in those back up offers!

Comments

Guest	Media Districts Entertainment Blog » The Art of The Back Up Offer said: PingBack from http://mediadistricts.com/?p=304486 May 1, 2008 10:38 PM
Member Since '05	Karen Weger said: That is good to know. Thanks! May 2, 2008 8:44 AM
Guest	No back-up offers here said: It's not the agents that don't want to put in the back up offers, it's the clients. Those that really want to buy don't want to wait several weeks to find out if they can get the home or not. It comes down to that famous four letter word.....NEXT! May 2, 2008 6:56 PM
Member Since '03	Mipeco Realty, Inc - Michaela Krestenic, Broker-Owner said: I have to agree with the "guest" on this one ... personally, unless I had so much money I could be buying more properties at the same time and time was not an issue, I would put a back up offer in but not if I really want to buy something and other deals may be popping up all the time. Why would I want to wait for weeks for something that may never happen? ... So I can certainly see the clients' reasons for not wanting to wait. May 4, 2008 10:17 AM
Member Since '06	Cathy Clark said: Clients are indeed reluctant to place back-up offers. However, the ones I have done always include a contingency stating that the Client will continue the property search and may revoke the back-up at any time. Client must be notified if and when back-up is about to be presented with the option of revocation at Buyer's discretion. The search continues with the prospect of the first offer falling through. No harm, no foul. May 5, 2008 11:39 AM
Member Since '05	Jana Davis & Marcia Demerjian said: If your client has not found another property, why not the back up offer? What do they have to lose? Our experience with short sales have been many buyers can't wait for the lender and bail. If you have requested to be placed in 2nd place that agent will know who to call in the event this does happen. Jana May 7, 2008 1:30 PM
Member Since '05	Cyd Weeks said: I'm wondering why so many of the offers are falling through to begin with...? Most of my buyers also are firm buyers...ready and willing, so they don't do back up offers too often. I think I've done one in the last year and by the time we got a call we were already in contract on something else. There's so much on the market, including REO's, what's the point of waiting in line? Short sales is a different animal entirely and again, since most of my buyers are ready to pull the trigger the LAST thing they are looking to do is put a back up on a short sale unless the listing agent can tell me the first is going to pull out and they know the pricing the bank will approve. May 8, 2008 6:32 AM
Member Since '03	Curt Darragh said: Thanks for all the comments, I guess I need to clarify, these deals are REO's meaning they are always sold AS-IS. When these deals fall throught its typically within 7 days. Buyers must submit the contracts, addendums, and down payment money within 5 days. If the bank allows an inspection contingency there is a 7 day window. So there is no real waiting for months on these deals. I've only had one deal fall apart after the 7 day period and that was becuase of all the changes in the mortgage industry. (The appraiser checked off that we are in a declining market - which we are - and the bank - Bank of America - would no longer do 5% down and the buyer didn't have 10%). Cathy you are right on with your contigency. Allow your buyer to continue to shop and reserve the right to withdraw.... the buyer has nothing to lose! May 9, 2008 8:59 AM