Making a Backup Offer on a Home: A Good or Bad Idea?

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Given the recent scarcity of homes available for sale to the buying public, there has been a sharp increase across the country in home buyer competition.  Low real estate inventory has been driving more multiple-offer situations and bidding wars on homes than we’ve seen in many years.

The Seattle area is a prime example, with 60 percent of real estate listings near the major job centers being sold in under 30 days.  There are just 1.39 months of housing inventory available, when 6 months is the standard for a healthy, balanced market.

For so many buyers, when they find their dream home today, the seller has just signed a contract with a different buyer.  Whether it’s the first home that the buyer has missed out on or the third, there can be a desperate feeling that says “This home is perfect for me, what can I do to save it?”

Backup Offers

One potential tactic that is becoming more popular is submitting a backup offer.  The home is already under contract with Buyer 1, but Buyer 2 submits a contract to the seller, and the seller can add a backup addendum.  When the seller signs the backup contract, it means that if Buyer 1 should cancel their contract for any reason, Buyer 2 is automatically under contract to buy the home.

Multiple backup offers are rare, but are possible as well.  The order that the seller signs these contracts would be the order in which they are entitled to buy the home.  Later offers would, of course, most often be at higher prices.  This would to entice the seller to sign a backup offer instead of putting the home back on the market if the first sale failed.

False Motives?

The problem with backup offers in a competitive buyer situation is that the backup offer actually increases the chances that Buyer 1 will close on the home.  Buyer 2 may feel better that they’re doing something constructive by signing a backup offer, but they’re really giving more incentive for Buyer 1 to expedite the sale.

Buyer 1 has plenty of potential reasons to back out of the contract.  They may find something they don’t like about the neighborhood.  An inspection could reveal structural issues.  A new home just down the street that Buyer 1 likes better might come on the market just a few days later.

When there are multiple backup offers in place, though, Buyer 1 takes on a protective stance.  They know that others want what they have, and they are more likely to forgive inspection issues and be more cooperative in seller negotiations.  If Buyer 2′s offer is at a higher price than Buyer 1′s, it creates even more of a sense to Buyer 1 that they’re getting a great deal.

If It Fails, Do You Really Want It?

There is always the possibility that Buyer 1 will not be able to finance the home, and the sale will revert to Buyer 2.  That’s fairly rare today with how zealously loan originators are scrutinizing loan pre-approvals, but it is a possibility.

Far more often, however, a sale fails because of an issue with the home.  Maybe the roof is falling apart.  The walls could be filled with mold.  The alley behind the home might be a favorite of the local drag-racing kids.  The next door neighbor might play his drum set every night at 3 a.m.

A buyer who is in a backup position automatically takes on a contract for the home when the first buyer opts out.  If a material defect on the property is the reason for Buyer 1 to cancel the sale, why would Buyer 2 want to be automatically under contract to buy this same property?

In General, Backup Offers Reduce Your Competitive Edge

Buyers submit backup offers in competitive situations.  Negotiations require buyers to gain any competitive advantage possible.  By submitting a backup offer, buyers often pigeonhole themselves into a subordinate position, and motivate their competition.

This doesn’t mean that buyers can’t do anything.  Have your Realtor let the listing agent know that you’re waiting in the wings with your buyer if anything goes wrong.  Stay on top of the transaction as it moves along, and if for any reason the sale fails, have your offer submitted immediately.

A buyer can still scoop up a failed sale in one day if their Realtor is on the ball and ready to submit the offer.  By being prepared, but not motivating the competition, home buyers put themselves in the strongest position possible.


© – Sam DeBord, Managing Broker, Realtor
Coldwell Banker Seattle: Coldwell Banker Danforth & Associates
Twitter | Facebook | LinkedIn | Google + | Sam (at)



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Skeptics like Edzard Ernst remind me of Humpty Dumpty in their use of words.They make them up as they go along.


Have not blogged for a while. Funny how your priorities change when faced with the possibility of a premature end. About two months ago I was given the all clear, which means 12 months after surgery and having finished six months of chemotherapy I am still alive, no longer have a colostomy bag and there are no visible signs of cancer in my body. Chemo has caused a peripheral nuropathy in my hands and feet which I am slowly recovering from. In May I was palpating a clients spine one Monday morning and suddenly could not feel any “subluxations”. For a few days I was concerned that the skeptics were in fact right, and I had been delusional to believe that I could palpate spinal joint dysfunction AKA, (subluxation). However when I could no longer button my shirt, I was referred to a neurologist who explained that I was not delusional and how chemotherapy had damaged sensory neurons in my hands and feet, it might take years to recover and there was nothing that could be done.  Hopefully I will prove them wrong, I am playing Golf, tennis and working again ( not as well as before, but getting there). If ever a statement was true, it […]

Chiropractic Live – Resisting the Medicalisation of and Promoting Chiropractic Care


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What Will Two Hundred Thousand Buy Today?

Well quite a bit actually, and right now if a person has great credit and a down payment they can buy a dream home for two hundred thousand dollars. The State of Texas has always had more affordable housing, even in the luxury end of industry, but if you take that same amount and try to buy a home in Chicago, New York, or Hawaii, and you will not receive very much for your money. Currently a studio apartment on East 54th street in New York is going for $319,000.00, and that does not include the $568.00 monthly maintenance fees.

Right now a home shopper in the Metro area can find three bedroom two and one half bathroom homes that are new construction from the $121,000.00 range and up. Dual income households can easily afford the monthly mortgage payments, and up keep costs. One problem is that those typical thirty year mortgages are harder and harder to come by today. Most home loan lenders want bigger down payments, and a fifteen-year term. They are still gun shy from the fall out of all those sub-prime loans that were approved in the 2000s.

If you do not mind the commute, some super custom luxury homes, in areas like Spring, The Woodlands, Conroe, Magnolia, and Tomball are widely available. The Spring Texas area has been voted one of the most affordable and best places to live by many real estate, and financial publications in recent years. It is perfectly situated for work, outdoor activities, dinning, and entertainment. Add all those previously mentioned attributes to a reasonably, or below market priced home, and you have your own personal nirvana.

Prices remain extremely high in the Galleria, Hedwig Village, Memorial, and Spring Branch area, and unfortunately, $200k is not going allow for the purchase of a mini mansion or personal compound anytime soon. However, looking further west there also seems to be homebuyers frenzy out toward the Cypress, Texas area, and many PGA designed golf courses are popping up out there too.

For persons relocating their families to the Houston Metropolitan area, you will be like a kid in a candy store when you start shopping for a home. The overall lot sizes, options, and amenities in most suburban neighborhoods outshine any state in the Union when it comes to the bang for the buck factor.


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Take the 100 Day Challenge and Beat Cystic Fibrosis!


Bonfire Health is teaming up with the Mauli Ola Foundation for the 100 Day Challenge to beat Cystic Fibrosis.   The Bonfire Team is committed to doing a Tabata workout everyday for 100 days to raise awareness about how crucial exercise is, not only for children with CF but for everyone’s health.

Ways to Get Involved in the 100 Day Challenge:

- commit to working out with us for 100 days

- post videos and comments about your workouts on Facebook

- get sponsored to raise money for the Mauli Ola Foundation to benefit children with Cystic Fibrosis

– or make donations directly to the Mauli Ola Foundation - Click here


For printable sponsor forms click here.

To learn more go to:

Bonfire’s Facebook page



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Have a Healthy and Happy Holiday Season

I’m a big fan of Dr. Mark Hyman MD. The following is part of an email that he sent out about keeping yourself healthy over the holidays:

Stress  can run down your immune system leaving you sick, tired, and wondering where the joy of this season went. So I want to remind you of the things you should do to ensure  that you stay healthy through this holiday season.

As always, make sure to eat a whole foods diet with plenty of fresh vegetables, keep up with your exercise routine, and even squeeze in some relaxation time!  Plus, provide your body with the extra nourishment it needs with appropriate vitamins, minerals, and herbs.  Here are the things that I recommend to all of my patients:

  • A multivitamin – the foundation for any health support regimen.
  • Vitamin D3 – very important through the winter months.
  • Buffered Vitamin C – well known for its support of your immune system.
  • Fish Oil – an old time remedy for good health that still stands true.
  • Probiotics – to support a healthy gut, a major barrier against pathogens and integral to the immune system.
  • Beta Glucans – helps your white blood cells do their protective role.
  • Cordyceps and mushroom extract – provide immune supporting properties.

For those who need extra support, also add:

  • Zinc citrate – a powerful immune supporting nutrient.
  • Natural anti-viral/anti-bacterial herbs – many herbs have broad-spectrum antimicrobial or immune-enhancing effects.


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The Quality of Reports on Cervical Arterial Dissection Following Cervical Spinal Manipulation

Chiro.Org Blog: This paper examined the quality of literature describing an association between cSMT and CAD. Case reports represented the majority of this literature. Since these reports may contribute to further understanding CADs as they relate to manual therapy, it is important that they are of the highest quality. This study has demonstrated that the literature infrequently reports useful data toward understanding the association between cSMT, CADs and stroke. As a result, the value of these reports toward informing our understanding of the relation between cSMT and CAD is minimal. We suggest that through the systematic collection of data features presented in this paper, a clearer clinical picture of the association between cSMT and CAD would be possible. This study lays the groundwork for developing a universal reporting tool for adverse events related to cSMT.


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