What is a Bumpable Buyer?

You're browsing real estate listings, and you come across a house that shows up as “BMP.' What does that mean?

BMP is an abbreviation for a bumpable buyer, and it's used in the Regional Multiple Listing Service (RLMS) that covers southwestern Washington and the Portland, Oregon metro area. A bumpable buyer is a person who makes a type of contingent offer. A buyer is considered bumpable if they put in an offer to buy a property, but the offer only stands if that person sells their own home within a given time frame.

Other MLSs have a similar property status indicator to reflect a contingent offer has been made on a house. Agents in some parts of the country use the MLS term “contingent with kick out.' Other places call these offers a bump clause.

The notion of bumpable offers exists around the country. Read on to learn what a bumpable buyer means for a seller and some alternatives to bumpable offers if you're a buyer thinking about making one.

What is a bumpable offer?

A bumpable offer, or bump clause, is a buyer's offer that's only good if a specific condition is met. It allows the seller the option to entertain other (better) offers. “Usually, people make bumpable offers on a home because they can't buy it until their old home sells,' says Sarita Dua of Keller Williams Realty Professionals in Portland, Oregon. “Their down payment is tied up in the home they still own. Basically, a bumpable buyer is saying, 'I want to buy your home for this price, and I will just as soon as I sell my house.''

Can you make an offer on a home with a bumpable offer on it?

Yes. Bumpable offers don't stop a seller from accepting more offers. The owner of a home who has accepted a bumpable offer can reject it if they get another offer on their house that is more to their liking, Dua says.

“If anything else comes along that they want, they can bump, or reject, that first offer,' Dua says. “The seller has to give the bumpable buyer written notice they are about to take another offer. So the seller goes to the bumpable buyer and says, 'Hey, I've gotten an acceptable offer with no contingencies, and I am going to take it. You've got to remove the contingency and buy my house or walk away.'

The length of the written notice required before bumping a buyer is spelled out in the bumpable offer. It generally ranges from 48 to 72 hours, Dua says. Once the notification period has expired, the seller can officially accept the new, non-contingent offer.

What's the difference between a bumpable offer and sale pending?

A property with a bumpable offer is still an active listing. It will show up in a search as available for purchase. A buyer can still make an offer on a property that has a bumpable offer on it.

A property marked 'sale pending' is no longer an active property. The seller has accepted an offer, and the deal is in motion. Some sellers still take backup offers in case the first falls through, depending on the seller’s needs and the local market conditions.

When is it wise for a seller to accept a bumpable offer?

Houses that have been on the market for more than 30 days or have a narrow market appeal are good candidates for bumpable offers, Dua says. If you’re a seller in this situation, you typically have two main options; “you can offer flexibility on purchase terms, or you can give room on the price.' 

A bumpable offer lets you attract buyers by offering a purchase on their timeline without cutting your price. “Having a bumpable offer on your house is one step closer to getting it sold,' Dua says.

Pros and cons of bumpable offers

Dua says houses with bumpable offers on them can sometimes be less appealing to buyers. “If there are four houses on the MLS that work for my client and one is bumpable, I am going to show him the three that are active with no bumpable offers first,' she says. “Unless the bumpable house fits his needs perfectly, I don't want to rock the apple cart. Bumpable offers can get complicated because you're messing with somebody's life.'

On the other hand, Dua says a bumpable offer on a house can sometimes make a house more appealing to buyers. “It's like, 'Oh man, someone else wants this house, so now I really want it.' It can make it look like there's competition for your house. That's good for a house that has been sitting on the market for a while, one where you have already dropped the price and still have no takers.'

Alternatives to bumpable offers for buyers

If you want more certainty in your housing purchase than a bumpable offer can give you, but you cannot afford a down payment until you sell your house, consider a mortgage product that can help you bridge the gap. One option, according to Juan Rodriguez, a Zillow Home Loans mortgage loan officer in Irvine, California, is to take out a home equity line of credit (HELOC), sometimes called a “second mortgage”, to use for a down payment on the new home, meaning you don’t need the bumpable clause. “Once you buy the new home and sell the old home, both mortgages would be paid off,” he says. 

Dua says there are also options like a buy-before-you-sell loan, where buyers pay a slightly higher interest rate and a fee that's a percentage of the loan amount. In exchange, they get a short-term loan they can pay back after they sell their house. They're free to make offers on homes with no contingencies. “It's a much less stressful way to go as a buyer than a bump offer,' Dua says.

Talk to a mortgage lender to explore your options when buying and selling a home at the same time.

To learn more real estate terms, you need to know when shopping for a house, check out 64 Real Estate Terms and Expressions You Should Know.