Should I put a backup offer on a house under contract?

The main downside to putting in backup offers is that you’re taking time and effort to put together a proposal to buy a home that you typically have a slim chance of getting. Having your heart set on a particular house shouldn’t stop you from finding other houses that are actually on the market and could be right for you. Moreover, there’s always a reason a contract falls through, and it’s important to know what that reason is so that you can avoid any pitfalls. If you do put in a backup offer, you obviously want to make it stand out. One way to do that is to offer more than the seller’s asking price .

How often does a house under contract fall through?

In most cases, people are buying a home with a mortgage . Because of this, they have to qualify for their financing. If their financial situation has changed since they were approved with a budget to shop for a home, they can be denied before closing. You can also have an appraisal come in low and not be able to reach a deal as a result. It’s even possible to fail an appraisal if the appraiser determines that anything in the home has to be remedied in order to avoid a health and safety issue. If there are specific issues enumerated in the contract that let a person get out of the contract based on the home inspection, that would be another reason for a deal to fall through. Finally, buyers might make the purchase of their new home contingent on the sale of their previous one. In these instances, the previous buyer can lose out on their opportunity for a home if they can’t sell their current one in time.

What happens if the contract is canceled?

If the buyer fails to meet their obligations under the purchase contract within the specified time frame, that transaction will be canceled and other buyers will have the opportunity to purchase the home. However, now isn’t the time to jump at the chance to sign a contract and offer your earnest money deposit . You should do the legwork to find out why the previous contract didn’t work out. If the house failed an appraisal or the home inspection revealed a major issue that the potential buyer didn’t want to deal with, you should be aware of it. Even if you decide to move forward with an offer, you’ll be doing so with the most information possible. This is always a better position to be in.

What Does Under Contract Mean? A Guide