The highs and lows of parenting and real estate.

Can I Make a Back-up Offer?

Let’s talk real estate for a minute. (Yes, I still do that, when I’m not hanging upside down.)

Here’s the scenario: You’ve been home shopping forever. I have you set up on an auto-search for the MLS. It emails you daily when a new property that fits your criteria comes on the market. We’ve seen every single house that could possibly be a match for what you need and want (and 307 others). Nothing was right. Nothing was perfect. You’re stuck in a holding pattern until The Dream House comes on the market. You’re frustrated. You have good money you’re willing to spend! (Or at least good money a bank is willing to let you to spend.) You just need the right house.

So you do a little online perusing. You know most of the Zillows and Trulias and Realtor.coms pull their inventory from the MLS, but maybe, just maybe, there’s something out there that slipped through the cracks for some reason. There’s no harm in covering all of the bases, right?

After some extensive online searching, a miracle occurs. It turns out the perfect house does exist and you’ve unearthed it! It’s the unicorn house. It has an amazing yard, backs to no major roads, is single-level, in an excellent school district, has a walk-in pantry, a closet with an amazing shoe rack, and an in-ground trampoline! Wasting not an instant, you call me. It’s 11:17PM.

Me: Hello?


Me: Ok… well it’s dark right now. And I’ve had wine. Plus tonight is the finale of The Challenge and I’m watching The Shit They Should’ve Shown and folding laundry. But we can totally go tomorrow; what’s the address?

You (guiltily): Well, it’s not from the search. I know you hate Zillow, but I found it there…

Me: It’s not that I hate Zillow, it just is often misleading. But it’s fine. I totally get it. Everyone searches Zillow. Text me the address and I’ll pull it up and see what the story is.

You: OKGREATIKNOWTHISISTHEONEIHAVETOHAVEIT!!! I was looking at the pictures and I’m pretty sure the tree in the back is a special genetically engineered mimosa tree. I heard about them on NPR. And the floor in the kitchen is that new composite material made from the shavings of unicorn horns. And I’m sure this is the neighborhood I read that Santa visits first every year. I saw a rainbow earlier this week and I know for a fact it ended in the backyard of this house. This is the house!!!

Me: I understand. I would tell you not to get your hopes up too high before we’ve seen the house, but I think we’ve moved past that checkpoint.

You: I need to go. I’m going to paint my nails to match the interior color scheme of the house so I make a good impression on it tomorrow when we visit. I want everything to be perfect.

Me: Right. Sounds good.

0.4 seconds later my phone buzzes with the address of the most wonderful and magical house you’ve ever seen. What I didn’t tell you was that I’m pretty sure I know where this is going. Sure, it’s possible the house is 3 square feet under the required minimum we set up in the search, or a block outside of the search parameters. Probably, though, it’s under contract.

See, there’s a flaw in the system, at least here in the Arizona Regional Multiple Listing System (ARMLS). There are currently three statuses in ARMLS that will show up as ‘Active’ when pulled into any other system:

1. Active – Available for sale and no contract has currently been accepted.

2. UCB (Under Contract – Backups) – A contract has been accepted in first position and the seller is willing to consider holding offers in back-up position.

3. CCBS (Contract Contingent on Buyer Sale) – A contract has been accepted in first position, but it is contingent upon the sale and/or close of escrow of the buyer’s property, so there is either a first right of refusal clause in the contract that states the seller can continue to market for offers and if he gets something better give the buyer 24 hours to remove the contingency or he will cancel, or he is just marketing for backups because it’s a buyer situation that is statistically more likely to fall apart.

Additionally, although there is not currently a technical designation for this, many agents use the UCB designation on a short sale as an indication the seller has accepted an offer in first position, but the bank hasn’t approved this offer. Once the bank has approved the offer they change it to Pending to show it’s a more stable situation.

All of these cases show up on any of the searchable real estate websites as Active.

Me: So… your unicorn house is under contract.

You: WHAT???!! I can’t breathe… I think I’m dying.

Me: Get a paper bag. Try to think happy thoughts. The agent has it listed that it’s under contract but they’re accepting back up offers. So that’s why it’s showing that way on Zillow. But it’s been under contract for 3 weeks, so my guess is that it’s closing in a week or so.

You: NOOOOOOOOO. I drove by this morning and the next door neighbor was getting into his car. I’m pretty sure it was Ryan Gosling.

Me: I’m really sorry.

You: Ok, but if they’re accepting back up offers, than can I still see it? Because I want to do that. I want to write a back up offer! We will match whatever they have. So if that buyer backs out, then we’ll get the house! There’s still hope, right?

Me: Um… well… back up offers can be problematic. I’ll call and see.


Me: Hi, your listing with the mimosa tree-

Listing Agent: Yes, the one with the pot of gold on the side yard. It’s under contract.

Me: Yes, I know. I have a buyer who’d like to make a back up offer.

Listing Agent: Oh… well, we’re through the inspection period and the appraisal, soo…

Me: Ok, but you have it listed that you’re accepting back up offers, and my client would like to see it and write one.

Listing Agent: Um… well my sellers are actually packing to move. And they have 4 kids under the age of 5, so scheduling a showing right now might actually make them murder me.

Me: Why do you have it listed as UCB then?

Listing Agent: Well, I mean, back up offers can’t ever be a bad thing, right? I wanted to make sure I was still marketing the property as aggressively a possible for my sellers. We want to make sure all of our options are open.

Me: OK, so if we can’t see it, but my buyer still wants to write a backup offer, can you disclose the terms of the contract you accepted so we can match it or do better than it to have a contract suitable for your seller?

Listing Agent: Oh, I can’t disclose the terms of the contract until we’ve closed escrow. That would be showing our hand.

Me: Technically, you can if your seller consents to allow you to disclose. And if we don’t know what you’ve accepted, how can we write up something to match it?

Listing Agent: Let me talk to my seller and get back to you.

*10 Minutes Later*

Listing Agent: My seller has decided not to accept back up offers at this time. I’ve changed the listing to Pending. I will keep your information on file and contact you if anything happens to this buyer.

Me: Right. Thanks.


Me: *Relays conversation*

You: *Dies inside*

In summary: Back-up offers suck and UCB is stupid.

In a faster, more competitive market than we’re in right now, back-up offers can potentially be useful. If a seller gets 12 offers after 24 hours on the market, it might make sense to accept one and then accept another in back-up position, if two were similarly competitive. In 99% of situations, however, it makes more sense to go back on the open market if your buyer cancels or is unable to perform. Most of the successful agents I know keep a file of interested parties on listings that are currently under contract, and if it looks like things are going south, they contact the potential buyers/agents and let them know it’s time to put together their best offer. UCB is a silly, over-used, under-analyzed status that mostly makes buyers confused and allows agents who have listings under contract to continue to market the listing to gain new buyer leads.

Dear All Internet Real Estate Search Sites,

Figure out a better solution for this.

Love, Everyone in Arizona




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