Photo: Janaya Dasiuk
There are so many upsides to being a Colorado homeowner and that’s lead to an incredibly busy real estate market in 2020. There are a couple of factors really driving our market some of the most powerful are: people are moving here due to remote work possibilities and looking to live a lifestyle that includes their outdoor hobbies, quarantine has made specific home attributes more desirable like having outdoor space and more square footage for working or learning from home. But, the MOST powerful factor driving our market is low interest rates. Interest rates hit record breaking lows 13 time this year…so many times we sounded like a broken record encouraging clients to refinance, buy a larger home or accomplish their homeowning dreams.
With significantly more demand than listings to sell we’re in a competitive market. This is the kind of market you need an experienced agent (hmm hmm like myself) to guide you through. The typical offer from a year ago is no longer a competitive offer and will likely go to the bottom of the stack in a competitive situation. Having your Realtor advise you on how to make the most competitive offer and trusting them from the beginning will keep your ride on the emotional roller coaster as short as possible.
What is back up position?
Once you find a home you love and submit an offer, if you aren’t the chosen offer the Seller most likely wants to put an offer in back up position. What is back up position? It’s when the Seller is under contract with their first choice Buyer but also has an offer in Second Position. The second position offer is called a back up offer. If the offer in first position is terminated then the offer in second position activates and moves forward with their transaction without the home going back on the market.
Why do I encourage back up offers?
When you’re in back up position for a property, if the property falls out of contract, you immediately move into first position instead of the home going back on the open market. It’s a win win, you get the house you want without having to compete again and the Sellers don’t have to endure a round of showings. As the Back Up Buyer you don’t have any earnest money down, you aren’t spending money on inspections, etc but you do have a signed contract and need to sincerely be willing to move forward if the opportunity presents itself Colorado has about a 10-15% cancellation rate on contracts right now. So that means you have a decent shot at being able to move forward on the home (it’s only 10% but that’s better than no chance at all).
The major deadlines where contract typically fall apart is appraisal and inspection. I strongly suggest having the drafted and signed contract to keep everyone to those terms. There were times this summer when we saw appreciation jumping month to month which may have tempted some Sellers to see how much they could get on the open market again.
If you have any other questions about buying or selling your home I’m happy to help. Get in touch so I can help answer your questions and guide you through your next move!
Written by Colorado Realtor: Megan Douglas @afreshtakeonrealestate