Real Estate Agents - How does a "backup" contract work?

Author

How does a "backup" contract work?

miamicuse

2006-02-27, 10:21 pm

Was interested in a property about nine weeks ago but did not get the house
because I got beat by another seller who submitted the offer "as-is" and I
did not. We both offered full listing price.

Then out of the blue I got a call from the agent saying "hey the contract
fell through the financing did not work out, still interested?" so I said
yes. I said you have my old contract the same conditions just write up a
new contract and I will pick it up and sign it, and I will have my attorney
look it over and then return it to you. Agent says "fine but you better
move fast because if we cannot get this deal done quick the owner wants to
relist the property, and that will open up another bunch of buyers and I
want to give you first shot at this..." so of course I was appreciative.

Now...I picker up the partially filled contract, it's a standard Florida
Associaton of Realtors FAR/BAR contract (As Is Sale and Purchase Contract),
however it says "back-up" and on item 20 (ADDENDA) it is also checked [x] P.
Back-Up Contract. The listing agent told me that he still has not yet
officially gotten the signatures from both the seller and original buyer to
release and void the original contract but he expects it to happen any time
soon. That is why it is considered a back-up contract.

I am a little uneasy about this...if they don't get it resolve soon, I could
be stucked with a back-up contract and it will obligate me to move forward
with loan application, inspection etc... that I don't want to do if it were
a back-up situation. Second, I don't know what is written in the original
contract, the buyer could be applying for another loan for all I know, or
the seller simply want to get a back-up offer as leverage, or want a signed
contract in hand before he/she release the original buyer's contract. Could
be a lot of things.

I think I will still have my attorney look it over but my inclination is to
wait until the original contract is null and void before submitting an
offer, even if it means I lose this deal because of this delay.

Any advise?

MC

justme

2006-02-28, 10:21 am

You can submit it as a back up offer. However, you are not obligated
to do your financing and inspections until the original offer is void.
Then you will be the new "offer" and will proceed that way.
If it becomes a lengthy process or you find a new home in the meantime
you can withdraw your "backup" offer.

Ryan Dean

2006-06-16, 1:25 pm

[This followup was posted to alt.real-estate and a copy was sent to the
cited author.]

In article <J6qdnd8MQZUIM57ZnZ2dnUVZ_sSdnZ2d@dsli.com>,
nmbexcuse@hotmail.com says...
> Was interested in a property about nine weeks ago but did not get the house
> because I got beat by another seller who submitted the offer "as-is" and I
> did not. We both offered full listing price.
>
> Then out of the blue I got a call from the agent saying "hey the contract
> fell through the financing did not work out, still interested?" so I said
> yes. I said you have my old contract the same conditions just write up a
> new contract and I will pick it up and sign it, and I will have my attorney
> look it over and then return it to you. Agent says "fine but you better
> move fast because if we cannot get this deal done quick the owner wants to
> relist the property, and that will open up another bunch of buyers and I
> want to give you first shot at this..." so of course I was appreciative.
>
> Now...I picker up the partially filled contract, it's a standard Florida
> Associaton of Realtors FAR/BAR contract (As Is Sale and Purchase Contract),
> however it says "back-up" and on item 20 (ADDENDA) it is also checked [x] P.
> Back-Up Contract. The listing agent told me that he still has not yet
> officially gotten the signatures from both the seller and original buyer to
> release and void the original contract but he expects it to happen any time
> soon. That is why it is considered a back-up contract.
>
> I am a little uneasy about this...if they don't get it resolve soon, I could
> be stucked with a back-up contract and it will obligate me to move forward
> with loan application, inspection etc... that I don't want to do if it were
> a back-up situation. Second, I don't know what is written in the original
> contract, the buyer could be applying for another loan for all I know, or
> the seller simply want to get a back-up offer as leverage, or want a signed
> contract in hand before he/she release the original buyer's contract. Could
> be a lot of things.
>
> I think I will still have my attorney look it over but my inclination is to
> wait until the original contract is null and void before submitting an
> offer, even if it means I lose this deal because of this delay.
>
> Any advise?
>
> MC
>
>
>
justme's advice was right. If you have any questions beyond that feel
free to e-mail me; RyanD@American-Way.com

--
Ryan Dean
REALTOR, SOFI, HCOA
American Way Real Estate
710 S. Jefferson Ave.
Cookeville, TN 38501
Direct (931)529-1712
Office (931)646-4010 ext. 2160
Fax (931)858-5570

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