“When one door closes, another opens.” – Alexander Graham Bell
Breaking bad news to a client is the pits.
Imagine the call from the buyer’s agent saying, “after the home inspection or after reviewing the Homeowner’s Association disclosure docs, that the Buyer is declaring the contract Void.”
Then you have to call your client with the bad news. Hey, I’ve been on both sides of that phone call and it’s never easy.
It happens.
Home Sellers, like Buyers, can get caught up in the excitement of multiple offers and bidding wars. Who wouldn’t?
But accepting the highest priced offer can also be accepting the offer with the greatest risk of not going to Settlement.
Emotions run high, and this isn’t HGTV where things always work out.
Imagine that you are the buyer and this is YOUR money, and you know that you can pull the plug on the deal for many reasons.
It happens.
secure a Back-Up Contract right away
Home Sellers can eliminate much of the risk simply by designating the next best offer as the “Back-Up Contract”.
For example, the standard sales contract paperwork we use here in the Vienna real estate market includes an optional Addendum with Association approved clauses.
So, if the original contract becomes Void, then the Seller can send proper Notice to the Back-Up buyers which automatically makes their offer the Primary Ratified contract.
Ta-da!
In most cases, these buyers will be super excited and the Seller won’t have to go back to square one cleaning up their house and getting ready for an open house.
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95% of home buyers never consider this stealth strategy
This strategy can help home buyers in low-inventory markets like we almost always have in sunny Northern Virginia.
When you are house hunting and making offers, there is nothing worse than coming in second. Runner-up. Silver Medal. Yes, the bridesmaid again!
The difficult truth is that a Seller can only sell their home once, and can anguish over selecting one choice over another.
In the event you are a runner-up on a home you really, really want, have your agent work to make your contract the back-up contract.
By positioning yourself and securing that role, you will have created an opportunity that 95% of home buyers never consider.
So, why haven’t they considered this strategy? Because their agent never suggested it.
Again, it’s a long shot and agents would rather sell you something else.
Across the country, real estate agents and home buyers are getting trained to follow only the newest listings, to see them quickly, and to submit offers before a deadline. It is exhausting and likely produces the same result.
Recommendation
My recommendation is to consider using the Back-Up Contract strategy, especially in low inventory markets.
When a home has inspired you to make an offer, keep your emotions in check and realize that being the bridesmaid may be a blessing in disguise.
Smart Real Estate.
