What is a Backup Offer?Let's start by looking at what makes your offer a backup offer. First, the seller has already accepted another offer. That first offer is probably a contingent contract, which depends upon a certain number of events that may or may not happen to close. Some of those contingencies might be:
- Contingent on the buyer selling an existing home
- Contingent upon inspections, which include a satisfactory home inspection
- Contingent upon the home appraising for the sales price, and a low appraisal is a possibility
- Contingent upon the buyer obtaining favorable financing, and anything can happen in underwriting
|Writing a Backup Offer Is a Good Idea|
A backup offer needs to be signed by all parties to the contract to be effective. Sellers can sign more than one backup offer providing the seller makes the position of each party known. For example, you could be in #3 or #4 position if there are four backup offers. Ideally, you want to be in #2 position.