Some Times, Back-Up Offers Work
Right now, there are several houses in the Collingwood, Blue Mountain area that have conditional offers pending on them. Sometimes this is because the buyer has a home to sell or, it may be conditional for a short period of time while the buyer gets approval for financing or has a home inspection and so forth. During this time, the seller cannot enter into another firm agreement with another buyer.
I’ve often been asked if someone could offer more to bump out the first offer and the answer is no if an offer has already previously been accepted by the seller and is still in the conditional period. Here is an example.
Let’s say Mr. Smith has his home for sale for $325,000. Mrs. Jones comes along and makes an offer to buy the house for $320,000 subject to her being able to secure financing and have a home inspection on the property within 7 days. Mr. Jones accepts the offer and now, there is a conditional offer pending. The house remains on the market because the agreement with Mrs. Jones is not yet binding. Along come the Carter family the next day. They just love the house and are willing to give Mr. Smith the full $325,000 he was asking. What happens now?
In this case, Mr. Smith is not at liberty is simply accept their offer as Mrs. Jones still has another six days during which she has the property “tied up” so to speak. What Mr. Smith can do though instead, is accept the offer and insert a condition of his own saying that in the event Mrs. Jones does not remove her conditions by the end of the 7 day period, then he accepts their offer. For the Carter family, they would now be in what we call “back-up” position.
Does it work? I’ve had four such situations in the last few months. In two cases it did not work for my buyers as the first buyer did fulfill their condition. In two other cases, it did work for the buyer and the back-up offers were ultimately the successful buyers. In one case, I was representing the seller and we actually had competing back-up offers. It can be confusing for the buyers and sellers involved but it is our job as REALTORS® to guide them through the process.