How To Win A Bidding War With A Backup Offer

Posted by Gabrielle Fuqua on Wednesday, May 27th, 2015 at 8:34am.

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Whether you're looking at homes for sale in Longmont, Colorado or Louisville, once you find the home you'd like to call your own that's when the real work begins. Let's say you're ready to invest in a property. You're pre-qualified and have a nice downpayment, but your offer wasn't accepted on that dream house. This is more common in today's strong real estate market. All is not lost. A strong backup offer can turn the tides and make that house your home.

What is a Backup Offer?

Once a homeowner has accepted an offer, they can accept backup offers if they feel for any reason the deal may fall through. And with such a competitive housing market in neighborhoods such as Vista Ridge in Erie, for example, this is a solid move because nothing is final until several factors fall into place. So by asking the owner to accept your offer as a backup offer means you are in line to buy the property if the deal fizzles out. Bonus, there is no additional cost to place a backup offer. 

The Pump is Primed

The homeowner has accepted an offer. They are likely preparing to move. Perhaps they've scheduled movers, bought another home, either way, they've had a taste of selling thier home and they are ready to close. If the first deal is a no go, your backup offer is ready and waiting to surf that wave of momentum straight to homeownership. 

Knowledge is Power

Often deals fall apart after the home's inspection. The good news is the homeowners are now aware of potentially deal breaking problems and are less likely to play hardball, afraid your backup offer might fall through too. You can also save money on inspections since it's required for the homeowners to disclose any problems the previous buyer found.

Backup Offers Are Seeing More Play

Since mortgage reform laws have been instituted, loan qualifications are tougher. Details matter. If the original buyer's financing doesn't come through, there you are pre-qualified and ready to make the deal saving play.

Hang Around, But Not Forever

When deals get drawn out, it's likely the homeowner and buyer are struggling to come to a mutual agreement. Set a 30 day limit on your backup offer. If a homeowner can't foresee an easy resolution with the first offer, they may decide to accept your offer before the chance is gone.

Patience and persistence is the name of the game. Hang in there and don't give up!

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1 Response to "How To Win A Bidding War With A Backup Offer"

Nate Burger wrote: This is excellent advice! It can be such a letdown to make an offer, only for your plans to fall through. I'll definitely remember this if and when I go house hunting again. Of course, with the help of a professional.

Posted on Wednesday, May 27th, 2015 at 8:40pm.

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