Contracts
A 'backup offer' in a New Mexico real estate transaction is an offer:
AThat is invalid because only one offer can be pending at a time
BAccepted by the seller to become effective if the primary contract falls through✓ Correct
CThat replaces the primary offer immediately
DMade by the seller to the buyer
Explanation
A backup offer is a secondary offer the seller accepts contingent on the first contract falling through. If the primary buyer cannot close, the backup buyer moves into position without new negotiations.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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