What to know about backup offers

what to know about backup offers



Homebuyers and sellers: this is what you need to know about backup offers. There is a lot of misinformation about what a backup offer is and what it means for each side. Let Be New Orleans provide you with the answers to your questions!


First things first, though: What is a backup offer?

A backup offer is when a buyer and seller agree to the terms in a contract for the buyer to purchase the home. However, because the house already has an accepted contract, this offer will be the first option should the original offer terminate their contract.

What’s great about being the backup offer is that you are automatically the accepted offer should the first offer cancel their contract. You don’t have to worry about another bidding war!




How are backup offers different from being the main contract?


#1: No deposit is given

When you’re the main (or first) contract, you must provide a deposit within 72 hours. Not in this situation! As the buyer with an accepted backup offer, you do not have to provide a deposit unless you move into the primary position.


#2: You can keep looking at houses

Because you’re only the backup offer for 123 Main St., as the buyer, you have every right to keep searching for homes. You can even make offers on other properties with no repercussions!


#3: You can cancel at any time

Found another house that you love? No problem! You can cancel a backup offer anytime you want!




As a seller, why would I want a backup offer? 

Why wouldn’t you?! Having a backup offer keeps you from having to go back on the market if the first contract falls apart due to inspections or financing. It’s always a great idea to have someone waiting in the wings. However, take note of the info above. The 2nd offer can cancel at any moment in time.


As a buyer, why would I want to be a backup offer? 

If you’re the buyer who has an accepted backup offer, what’s good to know is that you’re not out anything! It doesn’t cost you a dime to have an accepted backup offer.

We have seen many clients get their dream home because they decided to submit a backup offer.




What else should I know about making a backup offer to a seller? 

Make it as desirable as possible. Be aggressive with your terms and as flexible with your contingencies as possible. If anything looks shaky with the first offer or if that buyer is trying to nickel and dime them during inspections, sellers will tend to say no to all their demands to try and get your offer in the first position. Now is not the time to ask for closing costs or anything else you don’t need.



Being a backup offer has worked in many client’s favors before. It’s something we encourage all of our buyers and sellers to consider when looking at offers. If your agent can’t explain how a backup offer works, find yourself a new one who knows they have won many houses that way!


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