Have you ever seen a home marked as “Sale Pending”, and thought to yourself, “Well, we can’t make an offer on that one”, think again! Sure, the “Sale Pending” label means there is currently a negotiation between the buyer and seller going on, but sales can fall though. For that very reason, it doesn’t hurt to make a backup offer. Especially if it is a home you really do like. Keep reading to learn more about how to make a backup offer, and click this link to read the full article.
“If a buyer is in love with a particular home that happens to be pending, why not give it a shot?” asks John Lazenby, president of the Orlando Regional Realtor® Association.
So don’t let go of that dream house just yet. Here’s what you need to know on making a backup offer If the original deal falls through and you’re next in line—you could end up nabbing the home you were pining for all along. Sweet!
Why would a pending home sale fall through?
Even after all the work that a buyer and seller went through to create the contract, sales can still fall through.
“The contract often contains contingencies that can kill a transaction if they’re not met,” says Lazenby. Common examples are contingencies related to the following:
- Inspections: A sagging foundation, leaking roof, or other big-ticket repair items could kill the deal.
- Appraisal: If a home is appraised under the sale price, the financing can fall through if the buyer isn’t able to make up the difference.
- Buyer’s loan approval: If a potential buyer is only pre-qualified, rather than pre-approved, the financing might not materialize.
Another common reason is a bit simpler: buyer’s remorse. Maybe an expected promotion didn’t come through or the buyer decided she didn’t like the open-plan kitchen after all. Truth be told, there are a million reasons buyers get cold feet and change their minds.
Reasons to make a backup offer
Some potential buyers are in a better position than others to wait it out. If you relate to one of these conditions, making a backup offer is a good idea:
You’re not under a time constraint—such as the desire to be settled before the start of the school year. “If a buyer is in a hurry, it might not be feasible to wait a month or longer to see if the initial contract falls through,” Lazenby points out.
Inventory is particularly tight, and there’s nothing else in your price range that’s tempting. Sometimes it’s best to wait and see on the house you love, rather than jump on something else that isn’t quite right.
The listing agent is able to give you some intel about the house that leads you to believe the other buyers might get cold feet or that there are contingencies.
It’s a short-sale transaction, which Lazenby says is much more likely to collapse than a regular transaction. Often the bank, or whoever holds the mortgage, will find the price too low and will demand the seller put it back on the market to achieve a fair price.