Real Estate Investing

The Basics of Backup Offers 

March 28, 2024

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What Is A Backup Offer?

Real estate backup offers are home purchase contracts that will allow a second person to purchase a home if the first, already existing offer falls through. 

Making a backup offer can give you a competitive edge in a hot market and open doors for real estate deals that initially seem unobtainable. However, it’s essential for backup buyers to navigate the process with caution. If you’re considering backup offers in real estate, you’ll want to understand their benefits, how they work, and the potential risks of being in backup position. 

In this article, you’ll learn the ins and outs of backup offers to increase your chances of securing your dream real estate deal or home. 

How Backup Offers in Real Estate Work 

To understand how backup offers work, you need to be aware of the process involved in submitting a secondary offer on a property. 

When a seller accepts a backup offer, it means that if the primary offer falls through for any reason, the backup offer automatically moves into first position. This can happen if the primary buyer fails to secure financing or backs out of the deal. 

As the backup buyer, you should continue your property search since the primary offer may still go through. However, if the primary offer collapses, as the person in backup offer position, you’ll be next in line to potentially purchase the property. 

It’s essential to stay in communication with the seller’s agent to stay informed of any developments. 

Benefits of Making a Backup Offer 

One significant benefit of real estate backup offers is that they can increase your chances of getting your top property should the primary deal fall through. By submitting a backup offer on a property you’re interested in, you essentially create a safety net for yourself in case the first buyer backs out or encounters issues with financing

This can prevent you from losing out on a property you love and have invested time and effort into pursuing. Additionally, backup offers demonstrate to the seller that you’re serious about purchasing the property (as does paying an earnest money deposit), which may give you an advantage if the primary deal does indeed fall through. 

It’s a strategic move that can potentially put you in a favorable position when real estate deals fall through without committing to anything until necessary. 

For sellers, accepting backup offers has benefits, too. Sellers can gain assurance if the primary buyer falls through by considering multiple backup offers and following through with a backup contract if necessary. Sellers are incentivized to accept backup offers because they can feel more confident that they will sell their home in their desired timeframe. 

Risks of Real Estate Backup Offers 

Mitigating the risks associated with backup offers involves thorough preparation and strategic decision-making. One risk is the potential loss of time if the primary offer falls through, only to find that the backup offer is also not accepted. This delay can be frustrating, especially if you have other properties in mind. 

Additionally, there’s a chance that the seller might use your backup offer as leverage to negotiate better terms with the primary buyer, putting you at a disadvantage. Another risk is that you may need to be financially prepared to move forward quickly if your backup offer gets accepted, which could strain your finances if you’re not ready. 

Understanding these risks can help you navigate backup offers more effectively. 

Tips for Making Backup Offers 

When making backup offers in real estate, ensure you submit a competitive offer that stands out to the seller. 

Start by setting a reasonable price based on the property’s market value. Conduct research to understand recent sale prices in the area. 

Consider including an escalation clause that automatically increases your offer if competing bids come in. Personalize your offer by writing a heartfelt letter to the seller expressing your genuine interest in the property. 

Work closely with your real estate agent to craft a backup offer that’s attractive yet flexible. Be prepared to act quickly if your offer moves into primary position, as sellers appreciate buyers who are decisive and reliable. However, don’t forget any important steps in the process, such as writing in a home inspection contingency and ensuring due diligence is given to the sale. 

Backup Offers Etiquette 

Understanding the appropriate etiquette for backup offers in real estate can help you navigate the process smoothly and professionally. When submitting a backup offer, ensure that it’s clearly labeled as such to avoid any confusion. 

Communicate openly with the seller’s agent about your intentions and be respectful of their time. It’s essential to be patient and flexible, as backup offers often involve waiting for the primary deal to fall through. 

If your offer moves into primary position, act promptly and decisively to secure the property. Remember that while backup offers can be beneficial, they should be handled with tact and consideration for all parties involved. Do not sign a legally binding contract for an accepted backup offer until you understand all the terms and conditions of the agreement. 


Overall, backup offers can be a valuable tool for buyers in a competitive real estate market. By understanding how backup offers work and following proper etiquette, you can increase your chances of securing a property that may have multiple offers. 

While there are risks involved, the potential benefits make backup offers worth considering. Remember to communicate effectively with the seller’s agent and be prepared to act quickly if your backup offer is accepted. 

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