Frustrated homebuyers in the Central Iowa market may be able to use the backup offer strategy to their advantage.
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A lot of Central Iowa homebuyers are frustrated right now. Certain segments of the market are on fire, and they aren’t able to get into homes fast enough. As a result, they feel they don’t have very many homes to choose from.
There may still be hope if you use the backup offer strategy.
In the past, once a home went under contract, there’s very little chance for a competing buyer to get their foot in the door. Once the seller had chosen another buyer’s offer, typically they made it to the closing table with no problems.
However, in those super hot segments of the market, we are seeing a higher fallout rate. Why is that?
First of all, many buyers feel like they need to make a quick decision in those market segments or they will lose the home. As a result, it’s very common for people to make offers on a home without fully vetting the property to make sure it’s the right home for them.
“IF THE FIRST DEAL FALLS APART, THE SELLER HAS YOUR OFFER TO FALL BACK ON.”
Secondly, multiple offer situations really drive up the price of a home. Buyers then have very high expectations of how that home will perform during the inspection. Buyers and sellers have a hard time agreeing what condition the property should be in, which has led to a number of deals falling apart after the home inspection.
Having a backup offer in place puts pressure on that first offer. If for any reason that deal falls apart, the seller would much rather go to your offer than go through the hassle of putting the home on the market again. Plus, since you have a backup offer in place, the seller may be more willing to let the first deal fall apart.
Not all agents can navigate the ins and outs of the backup offer, but we work hard at honing our skills in order to give our buyers the edge in this competitive market.
If you have any questions about this strategy or anything else, just give us a call or send us an email. Remember, if we choose your question for one of our upcoming videos, you’ll get a free subscription to Better Homes and Gardens magazine.
We look forward to hearing from you!