A reader wrote in with this frustrating story:
We just found a home we really like, but they accepted another offer literately hours before ours was submitted. We like this place enough that we’ve put in a backup offer. In the meantime, we’re still looking for another place.
My question is this, what kind of (low) odds are associated with non-short sale backup offers being accepted? I can’t find any statistics or even approximations on how often backup offers go though. I know the MLS data doesn’t keep track of backup offers. I though it might be possible to get at this by doing something like interviewing a number of agents to find out 1) How many backup offers they submitted 2) which ones were accepted. Then either apply this across the whole transaction base, or alternatively, try to develop a search which looked at what was common with the properties that were bough via a backup offer. Maybe something like non-standard pending times? I don’t know.
I haven’t had any personal experience with this, but I spent some time chatting about backup offers with my coworker Dave Billings, the Real Estate Operation Program Manager at Redfin. Dave is also a licenced broker and has done many deals himself. He estimates that “less than ten percent” of backup offers end up getting the home, but he did suggest a few things you could do that might have the potential to tilt the scales in your favor.
If you submit an offer that’s non-trivially higher than the offer that the seller has already accepted and you make it clear that you are serious about buying their house, that might give the seller an incentive not to make any concessions to the “primary” buyers (e.g. inspection issues, etc.), which might lead to those buyers choosing to back out of the deal.
If the seller is willing, you could even have your own inspection done while you are the backup offer. If you are willing to buy the home without any seller repairs, giving the seller that assurance on top of a higher price might make the seller even more interested in your offer, and less likely to play ball with the other buyers.
But in the end, it’s really in the primary buyer’s control at this point. If they really want the house, there’s nothing you’re going to be able to do. In this market, your best hope is probably just that the other buyer’s financing falls through, because they likely know as well as readers here do that there simply aren’t a lot of options out there to choose from today.
If you’re an agent or a buyer who has has some experience with submitting backup offers, we would love to hear from you in the comments.