We understand how frustrating it can be to search for a home in Austin. Half the battle is learning the key terms and what they mean in regards to Texas real estate. So each week we bring you Key Term Tuesday – our way of helping you decode the industry jargon that keeps you from owning your home search.
When looking at various home search sites, you may encounter “Backup or Contingent Listing” as a property status, but what does this really mean?
A listing that is in Backup Status is what Austin Realtors call “Pending Taking Backups”. This means that he owner has accepted a contract and is currently waiting for the buyer’s option period to expire.
So what’s an option period? It’s an agreed upon amount of time (generally 7-14 days) that a buyer purchases from the seller for the right to cancel the contract for any reason. If they cancel, they lose their option money (usually a few hundred dollars), but they are able to walk away. Since the buyer is not 100% locked in, the seller often wants to line up a backup offer should the buyer decide to cancel.
If a listing is in Contingent Status, Austin Realtors will call this “Active Contingent.” Active Contingent means the buyer of the property must sell their home before they can close on the purchase. The owner of the home has accepted their offer with this as a contingency.
If another buyer makes an offer on a listing in Active Contingent status, and it is accepted and executed as a backup, this will usually trigger a clause in the first contract for that buyer to either go forward with the purchase (even if their house didn’t yet sell) or cancel the contract. If the buyer cancels, this puts the second buyer in first position.
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Our team has a combined 55+ years of experience helping home buyers understand the r. Check out our approach to Buying a Home in Austin to learn more about our team and how we work. Then, call us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.