Hello!

My apologies in advance for the long post.

My husband and I put a bid on a house Monday. There were multiple offers and the house ended up selling for way above asking price (the house was underpriced). We had the second best offer and the seller's agent has offered to put us in "back-up" position.

However, we have severe reservations about some of the clauses in their proposed agreement and wonder if it is really worth signing one of these? For example, they "advise" us that we should receive confirmation before terminating the back-up agreement (i.e. if we found another house). But in this competitive market, where we may have only hours to submit a bid, this seems unwieldy. Also, is it normal to put a deposit down in a back-up position?

Is it really necessary to sign something like this and essentially be legally tied to a house that we have been turned down for?! If the first deal falls through, we are willing to stick with out original offer, but it seems like the agent would want to contact us again anyway, regardless of whether we had signed something. Is this true?

Thanks in advance for the advice.

-Stephanie

Real estate customs and procedures differ so much from state to state and area to area it would be hard to speak to the mechanics of your back up offer and your market.

In my area it is normal to put down a deposit with a back up offer however if I'm representing the buyer I want it to be a smaller amount than if it were a first place offer. You can put down say $500 or 1,000 with the provisio if your offer is moved into first place you would increase your deposit to whaever was reasonable and customary within 3 business days or so.

As for being tied to your back up position should you find another house it should be fairly easy to withdraw from that position; the only problem you describe seems to be getting confirmation of your withdrawal from the other party.

You might see if the other guys would accept a clause requiring you to be notified and accept in writing your elevation to the primary spot withing a certain time period or your back up offer would become void.

Additionally, as you said you could always write another identical offer should the first deal fall apart

Why not just say, that when constructive notice has been given to the sellers agent, that you are withdrawing from your back up position, it is at the same time notice to the seller?
Our new contracts have this constructive notice option, which should keep us on our toes to notify our buyers and sellers asap.

Hi, we were in a similar situation this week, and we withdrew our offer (full list price, no contingencies). It was gorgeious, over 6,000 square feet, a finished basement, stunning entry foyer, a little over 3 acres. However, it did have a very odd odor (mentioned in another post). The second time we looked at the house (last week), the smell had been somewhat mitigated by a generous dose of Carpet Fresh. Since this is a small Southern town, we asked around and discovered that not only did these owners have cats and 3 dogs, there were some serious odor problems that seemed to come and go. In rainy humid weather, apparently the house is uninhabital. I do not know what would cause something like this--surely not all of those pets? When we saw the house the second time, we brought along a friend who is also a home inspector, and he told us that, in his opinion, the house would pass inspection (he's tough, too), but that would not mean the house did not have issues. So much can be hidden behind Sheetrock, etc. I had noticed several Sharper Image air clean air machines in the house--and a small, square "bacteria/odor" machine that was discreetly parked on the table in the foyer.

We also learned that the house had been on the market for over a year--six months with the latest agent without one offer--and the owners were "desperate to move." Apparently they would have taken a *lot* below the list price. However, at this time we weren't privy to this info, and we made a full price offer, which was accepted within hours. We had done this despite the downstairs Berber carpet being shredded in places --artfully hidden by throw rugs, and in one spot, a visible square showed where the carpet had been cut our and replaced. (I'd planned to replace it with hardwood anyway, but this was before I knew about their dogs and cat, and how difficult it is to get urine odors out of subfloors.

But I am getting ahead of myself. The contracts, however, were not signed for **4** days while the LA avoided our calls, and, I believe, continued to shop our offer. (Word on the "street" confirms this.) Meanwhile, with 1 day to go in the LA's contract on this house, a visual tour was slapped up on Realtor.com. Hmmm. Then we found out that another offer had come in, and the buyer had instructed his agent to tell our agent that this offer had "contingencies." Apparently the buyers were in California and had never seen the house. The listing agent was the agent for both the seller and the Calif.

While we have no concrete proof--and it does not matter at this point--My agent suspects that the listing agent was using our offer to pressure the other party, perhaps to get a bidding war going. It may have been because the LA did not want to split the commission--a whopping amount, incidentally. I don't know what really happened; I may never know. However I feel bad for this poor California couple. They have been duped in the worst possible way. I realize that this Realtor did nothing illegal. And I completely understand why the Buyers would want to get top dollar. I would want top dollar, too, especially if I'd had no offers in 1 year. In a high end market, this is probably not a terribly long time for a house not to move. And this one is very, very pretty, freshly painted, the carpets fluffy and freshly shampooed. I am sure they have put lots of decorating $ into it, too. However, I am so thankful that we found out the truth and withdrew our offer. Thank goodness the Sellers hadn't signed! My Realtor has homes lined up to show us today and tomorrow (one I'd seen before, and it was a bit more than this house but it has no offensive odors; also the ownere motivated. Good luck with your adventures, Stephanie.

Stephanie: Consider yourself lucky. Who knows what the cause of the odor is/was, but something was smelling rotten and I'd say it included the way the deal was handled.
We've a long way to go in the real estate business before every agent treats both his/her sellers and buyers with the integrity that's supposed to go with our claim of professionalism. The games played regarding your "pretty house" were a prime example of agents harming our industry's reputation.
For your own sake, find a Buyer Agent who demonstrates a clear and complete interest in serving your best interests -- which means that the moment something doesn't feel right, you'll be advised to walk away from it.

Duncan

Stephanie, I'm not sure how the market works in your area, but in mine, no one gets a full price offer after being on the market for 1 year!!! Is your agent truly working in your best interest?

Those CA folks will be seeing the sellers in court next year, I guarantee you.