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I am interested in putting in an offer for a condo where the seller has already accepted another offer. The seller's agent told us that there is no contract signed yet, and we're free to put in a "backup offer" in case the other one fails (but he doubts that it will). We don't really want to be a "backup", and would like to submit a real offer.
Aren't they supposed to entertain all the offers until a contract is signed? Isn't this exactly how bidding wars start? We've only talked to the seller's agent so far. Should we be suspicious?
There's nothing stopping you from submitting a "real" offer, nor would I feel suspicious.
Presumably the seller has already evaluated all of the offers available at a point in time and selected the one they liked best. That bidder is now doing his/her diligence and if things go well, they'll sign a contract soon.
If you want to submit an offer, go ahead. If it's substantially higher/better than what has already been selected, I'm sure they'll give it serious consideration. Otherwise, they'll get back to you if the buyer currently in diligence falls through.
Contracts end up not getting signed for all kinds of reasons... you never know.
Sloppy seconds... go you
Until a contract is signed, you still have the opportunity to present an offer that the owners might still accept. They may have already verbally accepted an offer but it means nothing until a contract is signed.
I am assuming your offer is not as good as the one that has already been accepted and that's why it has been viewed as a back up one.
If you like the apt, put in an offer at the max price you are willing to pay and start looking. If your offer is the best, they will call you.
I am on the other side of the story. The sellers took my offer after few others that they have accepted before and contracts went out failed. Sometimes pending the seller history with the sell, it is better to have a safe buyer than one who is trying to create a bidding war. How would the seller know that you will complete the deal? Have you put a higher offer , no mortgage contingency and execution of contract within 24 hours? When one makes an offer and it is accepted, there should be a lock up period to allow a buyer to complete due diligence and sign. Bidding war are a risky business.
The fact is, no deal is done until it is fully executed. The reality is, it gets risky for a seller to start playing games when they are on the 2 yard line in getting an existing contract signed w/ due diligence nearing completion. lets say the existing buyer signs, right when a competing offer is sent in and start diligence that will ultimately take another 4-5 business days + 1-2 biz days of logistics to get new buyer contract sent over -- this is best case scenario, usually its longer than 5-6 business days turnaround. Now you got a frustrated existing buyer who signed and sent in escrow and is demanding to know what the hold up is. If he/she discovers a game is being played, then may withdraw the offer or put a hold on the escrow check or take another means of playing tough back. Meanwhile, what if the new buyer gets cold feet, or discovers something in diligence that causes pause. Also, what if the terms start changing and now seller asks original buyer to up their bid or change terms in contracts. The point is, its a high risk yet possibly rewarding play for the seller. Ive seen it backfire before where both bids end up backing out and then the seller has nothing. Think how you would feel if you were that original buyer, did 5-6 days of atty diligence, signed, sent it in w/ check, and now seller goes MIA for 6-8 business days w/out an explanation -- what would u do? What would u be thinking? Will u assume they are shopping your offer?
It sounds clear and easy when discussing it, but in the real world, its not without its risks when the boat gets rattled so close to shore.
My advice would be to submit the offer in writing anyway, even if seller broker claims they r only showing for backup. You have nothing to lose, just manage your expectations that the seller likely will go with initial deal that is about to be executed unless your offer is dramatically higher than the original
Just to give you a real life story - when I bought my apartment, the place was already in contract, no contract signed, but the other buyer's offer had been verbally accepted. Because no contract was signed, the sellers broker showed me the apartment and I made my offer. I am not sure if it was higher (I never found out), but it may have been *better* because it was all cash. In any event, I got the apartment.
Nothing to lose by putting your offer out there - you may not have the higher price, but maybe you are more qualified, or in some other meaningful way a more ideal buyer. Best of luck.
Not certain anyone mentioned this, but if this is a co-op your offer may not have to be higher. If you are more likely to pass the board than the current accepted offer then the seller may go with you.
You become the 'best' of the highest & best offers in a multiple offer situation.
In short, submit the offer and see what happens. In the end you are no worse off for doing this than you are right now.
I think the broker is being fair and honest.
There is an offer on the table that is in the final phase of completion. Anything can happen so why would you not submit this 'back-up' bid. Reality being, unless the offer being considered implodes you could forget it...unless you say things to the broker like..."hey, my offer is all cash and I'm offering ask or better than ask or I'll beat your current offer in cash". If there's one in the bag and your offer is not significant enough to stop the train...why bother.