Tahoe Home Buyer – What is a Back-Up Offer?

This past week I was asked by a Tahoe Home Buyer “What is a Back-Up Offer?” As the Tahoe real estate market heats up, buyers and sellers are once again dealing with back-up offers.

Here’s the situation: I have a buyer that has found a great Tahoe home. They made an offer and the seller accepted. They are currently in escrow. Things have been moving right along, inspections, title report, property disclosures, etc.… Then it happened. I got the email update from the sellers’ agent “…My seller is getting a back-up offer on the Tahoe home your buyers are in escrow on. Just wanted to keep your people in the loop….”

The Tahoe market has changed in the past few months. Buyers are finding a lot of competition with their offers. It’s tough enough with multiple offers in our second home market, but once again we’re getting back-up offer situations. What does this mean for a Tahoe Buyer who already has an agreement with the seller to sell? “What is a Back-Up Offer?”

In California, if you are using the California Association of REALTORS® Residential Purchase Agreement to buy your property, once a property owner has accepted an offer to sell with a buyer, they still have the right to accept additional offers from other buyers. Any accepted offer after the first accepted offer is accepted in a back-up position subject to cancellation of the offer that is currently in escrow.

To put it very simply a back-up offer is another offer to buy the property, but doesn’t have the right to buy unless the current buyer fails to perform and that transaction is cancelled.

Remember, the seller has agreed to sell to our first buyer. Both parties have a legal contract and as long as both the buyer and seller do what they’ve agreed to do, and perform pursuant to the agreed upon timeline, the current buyer will get their Tahoe home and the back-up offer will become extra paper work for the seller to put into their file.

As a buyer, when a back-up offer is made on a property you’re purchasing, the tone of the escrow changes. When a back-up offer arrives it’s a lot like being on a date for two and suddenly your date becomes a threesome. No warning, no notice, it just happens. They just sit down and join you for dinner and you can’t ask them to leave. You have unwanted competition. It’s just not the same when it was just the two of you. If you’re the one being pursued, it’s a great time, if you’re the one that’s in danger of losing the deal it’s not a lot of fun.

The most common reason for a Tahoe Buyer to lose a home to a back-up offer is because they were not prepared to perform in a timely manner. The most common delay is a problem with getting the buyers’ loan. If you find yourself as a buyer with the seller accepting a back-up offer the best thing you can do is stick to your contract deadline schedule, let your lender know immediately that you have buyer competition in the form of a back-up offer, and close on time.

Tahoe real estate “Back-Up Offers”.

Want to see what luxury condos are for sale in Tahoe City? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304

All information is deemed reliable, but is subject to change, and/or correction without notice.

Tahoe Home Buyer – What is a Back-Up Offer?