Can you put in an offer on a house that’s under contract? Yes, you can submit a backup offer.
What do you do if the house that you have fallen in LOVE with suddenly goes under contract? You submit a backup offer and hope the first buyer terminates the contract. You will then be able to buy the house you LOVE.
What’s a backup contract?A backup contract is an executed contract that is in the second position. It becomes the primary contract if the first contract is terminated.
How does a back-up contract work? You negotiate all terms of purchase with the seller. A back-up contract addendum is part of your executed contract. Now you sit back and wait to see if the buyer of the first contract terminates. You must still provide earnest money to the title company and an option fee to the seller. Both checks will be deposited / cashed.
What happens when the first buyer terminates the contract? You are now the buyer and your contract is the primary contract. You proceed forward with fulfilling the obligations of that contract. The obligations include having the property inspected, ordering an appraisal, securing a loan, and closing on the property.
What happens when the first buyer closes on the property? Your backup contract terminates. Your earnest money will be refunded. But your option fee is not refunded. Since your option is not refunded, you should negotiate a lower option fee in your backup contract.
If you are willing to pay the seller more than the first buyer, can the seller terminate the contract? Unfortunately the answer is NO. The buyer can terminate the contract but the seller can not terminate the contract. The seller can attempt to persuade the buyer of the first contract to terminate by being less willing to negotiate repairs with the first buyer. But even if you were willing to pay the seller more for his Spring TX house than the first buyer, the seller can not terminate the first buyer’s contract.
We entrusted Jill Wente with the sale of our current home and purchase of a new home. From the beginning... read moreWe entrusted Jill Wente with the sale of our current home and purchase of a new home. From the beginning she was extremely up front and honest about exactly what we would need to do to get our house sold. We had an incredibly tight timeline, that she explained would be difficult to make - but she helped us make it happen and our house was under contract in 2 days! She had recommendations for all our home repair needs and they were all professional and fairly priced. She worked hard to really sell our offer for our new home - she was able to pull off the tight timeline, securing a rent back from our old house so we had time to move out, and a contingency for our new home. Definitely exceeded our expectations. She was so helpful along the way - as first time home sellers we really relied on her and we feel lucky to have worked with her! You will not regret working with Jill! read less