4 Things Sellers Need to Know about Backup Offers

  • Lisa Sinclair
  • 10/14/21

It’s no secret that Knoxville is currently experiencing a strong seller’s market. Yet even in this competitive environment, almost 25% of all escrows fall through before closing. Home inspections, appraisal surprises, and loan approvals are just a few of the issues which can arise, causing the buyer to pull out of the deal.

An essential component of any listing strategy should be a good backup offer, meaning that another buyer is willing to step in and close if escrow falls through. As you consider a backup offer, here are 4 things you need to know:

  1. A Backup Offer Is Legally Binding – A backup offer is a fully executed offer, just like the original, so make sure the terms are acceptable. Typically, the
    buyer will include a contingency in the event they find another home.
  2. Multiple Backup Offers – In a strong seller’s market, it is not unusual to accept multiple backup offers. Always clarify the position of each backup
    offer and whether you will continue to accept backup offers.
  3. Leverage – Backup offers provide leverage during the escrow period as well as security for the seller. Use backup offers to discourage unreasonable
    requests for repairs or concessions during escrow.
  4. Earnest Money – Backup offers do require the buyer to submit earnest money, just like the primary offer. This stays in an escrow account. Often
    this is smaller than a typical deposit with the condition to increase the amount if the offer becomes the primary one.

Backup offers should be an important consideration in any home sale. Not only do they protect the seller if an escrow fails to close, but the buyer can also have another opportunity to close on a home they love.

Work With Lisa

Lisa Sinclair is a premier real estate agent with a commitment to excellence and specializes in home sales in West Knoxville and the surrounding areas. Whether representing buyers or sellers, she helps her clients achieve their long-term real estate goals through her local market knowledge and professionalism, making her a successful and trusted agent throughout the greater Knoxville area.

Contact