BIC TIP #1167: Confidential Terms and Backup Offers

Stephen Long opened this tip with “do not do drugs.” Solid life advice, but this is a real estate blog, so let us get to the real lesson. The terms of any offer are confidential. They belong to the parties, and they cannot be shared with a third party without the offering buyer’s consent. And when it comes to backups, there is a second rule to remember: only one backup offer at a time.

Offer Terms Are Not Gossip

The terms of an offer are between the buyer and the seller. Price, due diligence fee, earnest money, closing date, concessions: none of it gets shared with anyone else unless the buyer who made the offer gives permission.

That means no “hint hint, you might want to come up a little” phone calls to the other buyer agents, and no reading one offer’s terms out loud to another agent. If you would not want your buyer’s numbers handed to the competition, do not hand over theirs.

Multiple Offers and Escalation Clauses

This rule matters most when things get competitive. In a multiple offer situation, or when an escalation clause is in play, you cannot share the terms of any of the other offers without the permission of the offering party.

You can let agents know there are multiple offers if your seller authorizes that, and you can ask for highest and best. What you cannot do is turn the confidential details of one buyer’s offer into a bargaining chip against them. Check with your broker-in-charge if you are unsure how much you can say.

Backup Offers: One at a Time

Once you are under contract, your seller may want a safety net in the form of a backup offer. That is fine, with two guardrails. First, you cannot disclose the terms of the current contract to the backup buyer. Second, you can only accept one backup offer at a time.

Never accept more than one backup offer. Stacking backups creates confusion about who is next in line and puts your seller in a position no one wants to be in.

The Practical Takeaway

Treat every offer like it is stamped confidential, because it is. Share terms only with the offering party’s consent, keep the current contract private when taking a backup, and never accept more than one backup offer. And yes, as Stephen says, also do not do drugs.