What’s A Back-Up Offer?
A property is not actually “sold” until a sale closes and title passes to another party. For this reason sellers will often seek a “back-up” agreement in case the original offer falls through.
A back-up agreement is a complete sales contract that includes all terms and conditions but it has no effect if the first offer succeeds. However, if the first contract fails then a back-up agreement can come into play. In hot markets, there can be more than one back-up offer. Owners should not accept back-up offers as they come in because the second or third back-up may be better than the first. For specifics speak with a broker or attorney.
Because real estate agreements sometimes fail because of financing or inspection issues, a back-up contract often has value for owners, especially in tight markets.
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