SUZANNE POWERS | CEO | POWERS REALTY GROUP
So much confusion over Secondary Offers! I am hoping this Blog Post educates the public on how valuable it can be to STAY on the market and active even when you have received and ACCEPTED OFFER on your home.
What is a Secondary Offer? A secondary offer is a 2nd offer that is written on a property after an offer has all ready been accepted on that property. The first offer is called the primary offer and it stays primary until a contingency cannot be fulfilled on the contract by buyer #1. A secondary offer is an offer written by #2 buyer and accepted by the seller as a “back up offer”. The second offer once accepted by the seller stays in second position for a set determined amount of days and can move up to first position if Buyer #1 fails to perform on a contingency written in their contract and gives written notice to the seller that they cannot fulfill their contract.
How many Secondary Offers can Sellers Accept? As many as they want. A seller can have one primary offer and several secondary offers. If the primary offer fails to perform the seller has the right to then choose the best of the secondary offers.
So why is this so important? Well, it is about due diligence in representing the seller. The seller has the right to get the best and highest price for their home with the fewest amount of contingencies, and it is the real estate professional’s responsibility to perform at this level for the seller.
True Story: When we first opened Powers Realty Group I had 29 clients come with me to relist their homes with Powers Realty Group. For a period of time before we opened the company, those sellers were previously listed with my former broker ( XYZ Broker). Under Wisconsin Real Estate Law: Any buyer seeing the home under Broker XYZ was protected, and the contract would revert back to Broker XYZ. A Powers property did receive an offer from a protected buyer under Broker XYZ. The offer was accepted by the seller and reverted back to my former brokerage. Here is where some agents stop. The seller has accepted an offer and that’s it. I am so surprised that even top brokerages get this so very wrong.
Here’s is what happened next:
Broker XYZ called me to remove my lock box and stop showings ( Broker XYZ requested Powers STOP marketing the property? ). I said the seller wants to accept all secondary offers so we will continue to show and accept secondary offers. I was stunned that one of the biggest companies in the Midwest did not understand the rules of engagement, but so often I am explaining and teaching agents and brokers alike the importance Secondary Offers. Powers continued to market the home and DID get secondary offers and DID bump Buyer #1 out of first position when they could not perform, and the seller sold their home with Powers for $10,000 more with the secondary offer.
What if Powers had not continued to market the property? The impact on the seller would have been lost days on the market and a lower price.
So why write a blog post on Secondary Offers? We have three secondary offers in play right now on three separate properties. There has been a tremendous amount of educating on my part this weekend and it occurred to me that this would be news worth having on real estate. This is an exciting time for sellers who have move in properties in the Milwaukee’s North Shore. We are seeing multiple offers and for the first time in my career a steady stream of secondary offers.
So here’s the bottom line for Sellers: Get the facts from a well experienced and educated broker. Continue to show your home through the home inspection period. Collect secondary offers. HERE is the biggest move. If you receive multiple offers. Accept one and counter the rest in secondary position. Very few of the agents are doing this and this is a good strategic move for a seller to get their best price and insure a secure closing.
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