Glossary of Real Estate Terms (For terms not listed below)
|Backup Offer At times, a sale may not have a good chance of closing or an agent may like to take backup offers. Also, a buyer who really wants a particular house that is pending, may want to make one to make sure if the sale fails, they will be in first position. The most common type of backup offer is when a house has been sold contingent and the buyer bumps the original offer. Then they would only have to wait for however long the bump period is.
|Bump Clause This is the amount of time given a buyer who has bought contingent to firm up their contingency after a backup offer has been accepted. Typically a bump clause is 5 days. It can be any length of time, normally 1-7 days.
|Contingent or Sold Contingent A house has been sold to a buyer who needs to sell a house to be able to buy. In this situation another buyer may make a backup offer. The original buyer would then be given a certain amount of time (bump period) to either get the buyers house sold or be able to come up with financing to be able to own both houses at the same time.
Form 17 Disclosure Form Washington State Law requires a seller under almost all circumstances to answer questions on a document regarding the condition of their house. It is the sellers responsibility to disclose anything that may affect the usability of the property for a typical buyer. The buyer has three days to respond to Form 17. If they do not, then there is an implication of acceptance.
I specifically encourage sellers not to answer questions like, "Is the electrical system in good working order?" with a yes. It is conceivable that there could be problems with the electrical system that the seller is unaware of. That also goes for the plumbing, roof and other systems in the house. The seller should and must disclose any defects that they are aware of, but in my opinion, not answer questions that could imply the quality of systems in the house.
On the remarks section I have the seller include verbiage that explains to a buyer why certain questions are answered "don't know," while at the same time letting the buyer know that the seller is unaware of defects.
|Pending This means that a home has been sold but has not yet closed. An offer has been accepted but there are still conditions to be met. The sale is not yet final.
|Subject To Inspection. This means that the seller's house has been sold to a buyer who is having it inspected. About one in four sales fall through due to some complication during the inspection process. Due to the high number of sales that fail during this time, it is a good time to make a backup offer. Usually one of the following cause the sale to fall through: