Prospective buyers can submit backup offer
Q: We looked at many houses and then fell in love with one. I won’t describe or say where it is, because we are having enough problems with getting it as it is. I’ll only say it’s old enough to be called an antique.
The problem is that by the time we got our offer signed, the owners had already accepted an offer through a different agent, from another buyer. But as far as we can tell, it hasn’t finally sold yet. The sign still says “pending.”
From what I know, we should be ready to pay more for the property. We are. Our lawyer said that doesn’t matter, and there’s nothing we can do legally. He said the owners are not legally required to accept the highest offer and that we can’t upset a binding sale contract
anyhow.
Is this true? Can you suggest anything we can do at this point? This house is one of a kind and there’s no use looking for another one like it. Anything you can do to help us will be much appreciated. Should we talk with another lawyer? — F. and A. V.
A: Not many purchase contracts fall through, but you can hope. There’s a way to make sure that if this one does, you’ve got the place locked up.
You can submit a backup offer and get it accepted. It will contain all the provisions of a regular offer, including that higher price you’re willing to pay. The only difference is that somewhere in there it will say you’re offering or it would only take effect (consult your lawyer for wording) subject to the nonperformance of the existing sales contract.
The sellers’ real estate agent is bound by law to present all offers, and the owners of that antique property wouldn’t lose anything by accepting yours. Those first buyers do have a firm contract and will probably become the new owners. But if anything goes wrong with their purchase, the sellers could then obtain a release from them and sell to you. Price and terms would already have been agreed upon in that backup contract.
The sellers would be in the enviable position of a man wearing a belt and suspenders. Of course, you could be legally bound to buy until it is finally settled.
Q: As you advised, we invited agents from three companies to come over because we’re getting ready to sell our longtime home. We learned a lot and it didn’t cost us anything, but one place they seem to have very different advice is in the right price to ask. Do you recommend paying for a professional appraisal at this point? — D. L.
A: Most sellers rely on their broker’s comparative market analysis figures, which list recent nearby sales. When asking-price recommendations vary widely, you may have run into one of the few agents who will quote almost any price to secure your listing. Or one who recommends a low price, hoping for a quick and easy sale. There are even — rarely — agents who feel they have no right to recommend any price on a property for which they may eventually earn a commission.
If you do hire a professional appraiser, make it clear that you don’t need to pay for a long and complicated, written report. All you want is a simple estimate of value.
Actually, an appraisal may end up a valuable bargaining tool during contract negotiations with your eventual buyer. Although it is an estimate — albeit an informed, skilled one — the buyer usually accepts it as an impartial, almost scientific, proof of value, as indeed the courts do.