Should you accept a back-up offer on your Destin Florida property, and what is it?
I recently placed one of my Destin listings under contract. It’s a fast market, so the house went “pending” in one day. The offer was great, for cash, with a strong price and a fast closing. Of course, I had received several inquiries and showings as soon as it was listed. One agent whose buyers didn’t move fast enough, asked if they could put in a “back up offer”. What does that mean, exactly?
In Florida, you can write an offer for real estate with a “back-up” contingency. It says, in a nutshell:
- The back-up contract is contingent on the termination of a prior contract.
- The back-up contract is effectively withdrawn if the prior contract is not cancelled by a specified date.
- The buyer can withdraw the back-up contract at any time prior to notification that the primary contract is terminated.
How does a back-up contract benefit a seller?
A back-up contract obligates you to sell to the secondary buyer should the first offer fail to close. The failure to close could be for various reasons, such as: the buyer cannot get financing, the house does not pass an inspection, the buyer backs out, etc.
But why would you want to be tied in to a second contract? If you are, you will miss any potentially better offer that might come in. Let’s say, however, that the back-up contract has fantastic terms, like a strong price, cash, and few contingencies. Even then, the back-up buyer can withdraw his offer at any time prior to moving into first position. It’s really an “option” to actually become the primary contract.
So, it just ties you in, and the back-up buyer is in control. That’s to the buyer’s benefit, and not yours.
It’s Wendy… It’s Sold!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Email Wendy: [email protected]
This is not construed to be legal advice. For contract questions, consult an attorney. Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.