My client wants to submit a backup offer on a home that already has a contract pending. How do I get the information I need to prepare the backup addendum?
Ask the listing agent for the effective date of the pending contract. This date will go in the first blank.
Your client’s decision about the length of time he wants to stay in a backup position will determine how you fill in the last blank in the form. Some backup buyers may want to have their contract terminate within days if the first contract doesn’t terminate early, while others may want to retain their backup contract rights until after the last possible date that the pending contract might close. If your client wants his backup contract to last until or beyond the pending contract’s closing date, you can also ask the listing agent to provide the pending contract’s closing date.
Remember to tender the termination-option fee with your buyer’s backup offer if he wants an unrestricted right to terminate his contract and has provided for that in the main part of the contract.
concerning the option fee in this situation, should you do the option time like you normally would, like 10 days?
or wait and see if the first contract fails, then do the option time once your contract takes effect?
I just did one and when our back up offer went into effect I submitted an amendment to the contract starting the finance addendum and the option over at day 1 effective with the amendment date. I had watched an online lesson about it and that’s what the presenter indicated about how to handle. Seller had no issue signing the amendment.
Please see the last sentence in Paragraph B of the Back Up Offer Addendum, which addresses your question: “For purposes of performance,the effective date of the Back-Up Contract changes to the date Buyer receives notice of termination of the First Contract (Amended Effective Date).” All timeframes in your contract will be based on said notice. No need for addendums changing anything, as commenter’s trainer below suggested.
Please talk to your broker
You need to tender the EMD as well when you are in the back up position, otherwise the first sentence in paragraph B of the Back Up Offer Addendum wouldn’t make any sense. Our MLS lists the Pending date and Estimated Close date, so you can use those too if you can’t get an answer from the listing agent quickly enough.