I didn’t fully appreciate the power of a backup offer until one bailed me—and my client—out of a total mess.
Years ago, I was representing a seller in what should’ve been a smooth, full-price, clean-offer deal. The buyers were strong on paper, inspections went fine, financing was approved… and then out of nowhere, they pulled out three days before closing. No real explanation—just cold feet and a cancellation notice.
It was a punch to the gut. But we had a backup offer in place. Within 24 hours, we pivoted, revived the backup, and the home closed on schedule—no re-listing, no price drop, no drama. That’s when I became a believer.
Now, whenever I’m coaching new agents—or advising clients—I always talk about backup offers. Because they’re not just “plan B.” When used right, they’re a strategic tool that can protect timelines, reduce risk, and even help close better deals.
In this post, I’ll walk you through exactly how to handle backup offers in real estate—from both the listing side and the buyer side. We’ll talk timing, negotiation strategy, common legal pitfalls, and how to use backup offers to your advantage without wasting time or burning relationships.
What Is a Backup Offer in Real Estate (And Why It Matters)
A backup offer is exactly what it sounds like: a legally binding offer that sits in second position, waiting in the wings in case the primary deal falls through. It’s not just a “maybe” or a placeholder—it’s a real contract, signed and agreed upon, that only goes active if the first offer is cancelled.
Now, here’s what most newer agents get wrong: they either dismiss backup offers as long shots, or they treat them like casual promises. The truth is, a good backup offer can be just as strategic as a primary one—especially in competitive markets or with uncertain buyers.
Let me break it down.
How a Backup Offer Works (Mechanically)
From a contract standpoint, the buyer and seller sign a fully executed purchase agreement just like a primary deal—but it includes a clause that says the contract is only effective if the first deal cancels.
If the primary buyer walks, no need to re-list, re-market, or re-negotiate. The backup offer becomes active immediately, and you move forward with inspections, financing, etc. Just like that, the seller keeps momentum, and the buyer gets their shot.
Why Backup Offers Matter More Than You Think
Here’s why I always coach my sellers to consider accepting a backup offer:
- Deals fall through more often than most people realize—financing issues, cold feet, inspection drama, divorce, job changes. I’ve seen it all.
- A backup buyer keeps pressure on the primary—knowing someone else is waiting can help prevent buyers from making unnecessary demands.
- It gives sellers leverage—especially when they need to close fast or are juggling a contingent purchase.
And for buyers? Submitting a backup offer can be a way to quietly compete without overpaying in a bidding war—especially if they’re patient and prepared.
How to Handle a Backup Offer as a Listing Agent
From the listing side, backup offers are one of the most underrated tools you have—but only if you know how to use them strategically. I’ve worked with sellers who were hesitant to accept a backup because they thought it would “complicate” things. But once I explained how it actually works—and how it can protect them—they were all in.
Here’s how I walk sellers through the process and make sure it’s set up to work for them, not against them.
1. Set the Expectation Early
Before you even go under contract with a primary offer, talk to your sellers about the possibility—and benefits—of taking a backup.
What I say:
“Let’s consider accepting a backup offer if one comes in. It doesn’t hurt anything—it just gives us a clean option if something unexpected happens with the current buyer.”
This isn’t about assuming the worst—it’s about being ready for it.
2. Use Backup Offers to Maintain Leverage
If the buyer in first position starts asking for price reductions, repairs, or unreasonable terms after inspections, it’s incredibly helpful to say:
“We do have a signed backup offer in place, so the seller is comfortable moving forward either way.”
You’d be amazed at how quickly that can shift the tone of the negotiation. The backup gives your seller real leverage—and it helps keep the primary buyer in check.
3. Make Sure the Backup Offer Is Clean and Clear
I always review backup offers closely before presenting them to the seller. Even though it’s in second position, it still needs to:
- Match or beat the primary on price and terms (ideally)
- Have pre-approval or proof of funds ready
- Include a specific clause stating it becomes effective only if the primary cancels
- Set a clear expiration timeline if not activated
4. Avoid Overpromising
I never use a backup offer to pressure the primary buyer publicly, or give the second buyer false hope. I manage expectations carefully.
To the backup buyer’s agent, I say:
“We appreciate your offer and we’re accepting it as a formal backup. If anything changes with the primary, you’ll be the first to know.”
Simple, respectful, and it keeps everything above board.
How to Approach a Backup Offer as a Buyer’s Agent
If you’ve ever had a buyer lose out in a multiple-offer situation, you know the emotional crash that follows. But what a lot of agents miss is the chance to pivot—and put their buyer in position to win without the chaos of going back on the market. That’s where the backup offer comes in.
I’ve had buyers secure homes they lost out on just by playing the long game. And when that call comes—“Hey, you’re now in first position”—it’s always worth it.
Here’s how I handle backup offers for my buyer clients:
1. Talk Strategy Right After the Loss
When we lose out in a competitive bid, I don’t just move on. I immediately ask the listing agent:
“If anything changes with your buyer, would you be open to a backup? My clients are still very interested and ready to go.”
I do this even if the first offer is strong. Deals fall apart all the time, and it costs nothing to stay in the loop.
2. Frame the Opportunity for Your Buyer
Some buyers hesitate to submit a backup—especially if they’re heartbroken. So I reframe it:
What I say:
“Submitting a backup puts us next in line, with no risk. If the deal closes, we move on. But if it doesn’t, we’re in prime position—no bidding war, no surprises.”
This gives your buyer a sense of control, especially if they were emotionally invested in the home.
3. Make It Easy for the Seller to Say Yes
When I write a backup offer, I make it clean and low-friction. The goal is to give the seller zero reason to hesitate.
My checklist:
- Match the terms of the winning offer if possible
- Include proof of funds or updated pre-approval
- Keep contingencies tight and timelines flexible
- Add a clause that clarifies the offer becomes active only if the primary contract is cancelled
- Include an expiration date if not activated within X days
This shows the seller and their agent that we’re serious, qualified, and ready—without needing to renegotiate later.
4. Keep Your Buyer Engaged (But Realistic)
Once the backup offer is signed, you don’t want your buyer sitting on edge. I tell them:
“Let’s treat this as a bonus play. Keep looking, stay open. If this one comes back around, great. But we’ll keep searching in the meantime.”
This keeps the emotions balanced and helps prevent tunnel vision.
Common Mistakes Agents Make with Backup Offers (and How to Avoid Them)
Backup offers can be incredibly useful—but only if they’re handled correctly. I’ve seen agents waste time, confuse clients, or even create legal headaches because they didn’t understand how to manage the process. Most of the mistakes are avoidable with just a little planning and clarity.
Here are the most common missteps I see—and how I’ve learned to sidestep them:
1. Treating a Verbal Backup as Good Enough
This one happens a lot. A buyer’s agent says, “We’ll be a backup if anything changes,” and the listing agent nods and keeps moving. But unless it’s signed and in writing, it means nothing.
Fix: Get the backup offer fully executed.
Even if both sides “intend” to move forward later, only a signed agreement gives your client a real position. Otherwise, if the first deal falls through, the seller can take any offer they want—including a new one that beats yours.
2. Letting Backup Offers Drag On Indefinitely
A backup offer without an expiration date is just a passive commitment—one that can lock in your buyer (or seller) longer than they intended. That’s especially risky if market conditions are changing.
Fix: Always include a deadline or sunset clause.
“This backup offer remains valid until [date], unless the seller notifies the buyer of activation before that time.”
This keeps expectations clear and prevents awkward follow-up conversations three weeks down the line.
3. Using Backup Offers as Bluffs
I’ve seen agents suggest fake or weak backup offers just to pressure the primary buyer. It might sound clever—but it’s dangerous. If the primary buyer calls your bluff, and there’s no real offer behind it, your credibility takes a hit.
Fix: Only talk about backup offers that actually exist and are signed. Transparency builds trust—with both clients and other agents. That reputation matters.
4. Failing to Notify the Backup Buyer Promptly
When the first deal falls apart, time is everything. The longer you wait to notify the backup buyer, the more risk you introduce—especially if they’ve moved on or lost interest.
Fix: Put a process in place:
As soon as the primary contract is canceled, notify the backup buyer in writing that they are now in first position. Use the exact language outlined in the contract and confirm they still intend to move forward.
5. Not Coaching the Client Through the “What Ifs”
This one’s more subtle, but it can be a deal killer. If you don’t walk your client (buyer or seller) through how the backup process works up front, confusion can derail the whole thing. I always make time for a short walkthrough before anything is signed.
What I say:
“Here’s how this works, step by step. If X happens, we do Y. If it doesn’t, here’s the fallback. No surprises.”
Clients remember this. It builds trust and sets you apart as a true professional.
How to Create and Present a Backup Offer Like a Pro (Buyer’s Agent Edition)
Submitting a backup offer shouldn’t feel like an afterthought. When done right, it’s a presentation—an intentional move that shows the listing agent and seller that your client is serious, well-qualified, and ready to move fast if the opportunity arises.
Here’s how I present backup offers in a way that stands out from the inbox clutter and keeps my client top of mind.
Build the Package Like It’s a Primary Offer
Even though it’s a backup, treat it with the same level of professionalism you would for a first-position offer. That means:
- A clean, well-written offer with all signatures and contingencies clearly outlined
- A backup offer addendum or clause that specifies activation terms
- Proof of funds or pre-approval letter—front and center
- Optional but powerful: A short, warm cover letter or buyer note expressing continued interest in the home
If the original offer falls apart, the listing agent shouldn’t have to chase you down for missing documents. They should be able to activate the deal immediately.
Just because your offer is in second position doesn’t mean it should look like a second priority. I’ve seen too many agents throw together sloppy backup offers—missing docs, no context, no structure—and then wonder why the seller never circled back when the primary deal fell apart.
Here’s the reality: if your buyer wants the home, treat the backup offer like you’re aiming to win it right now. A tight, professional presentation sends a clear message to the listing agent:
“We’re serious, we’re organized, and if your deal crashes, we’re ready to move without delay.”
Here’s how I build every backup offer package, step by step:
A Fully Executed, Clean Purchase Agreement
Make sure the offer is completely filled out—just like you would for a primary:
- All buyer signatures completed
- Dates, deadlines, and terms clearly listed
- Offer price in line with market comps or known seller expectations
- Any custom terms (credits, possession dates, appliances, etc.) spelled out clearly
I avoid unnecessary add-ons or contingencies unless they’re crucial—because the cleaner the offer, the easier it is for the seller to say “yes” when the time comes.
Include a Backup Offer Addendum or Contingency Clause
This is the legal backbone of a backup offer—it should clearly state that the offer is accepted only if the primary contract is canceled, and becomes effective upon written notice from the seller.
I always use my local association’s official Backup Offer Addendum (or draft a custom clause if needed), and I make sure it includes:
- Clear language around activation
- A defined timeframe (e.g., offer expires if not activated within 15 or 30 days)
- Buyer’s right to withdraw at any time before activation (optional but smart)
This protects both sides—and gives the seller confidence that they won’t be stuck in a murky situation later.
Proof of Funds or Pre-Approval Letter—Right Up Front
The listing agent shouldn’t have to email you twice for a mortgage pre-approval letter or bank statement. Include it in the package, labeled clearly. I also ask the lender to be on standby if the offer activates.
What I include:
- Updated pre-approval letter from a reputable lender
- Proof of funds for earnest money and down payment (if applicable)
- Contact info for the loan officer in case the listing agent wants to verify
This isn’t just about paperwork—it’s about projecting confidence and readiness.
Optional (But Powerful): Offer Letter or Cover Note
Even in a backup position, a thoughtful note or an offer letter from the buyer can go a long way—especially with sellers who are emotionally attached to the home. Keep it brief and sincere.
Example:
“We understand this home is currently under contract, but we wanted to express how much we love it. If anything changes, we would be honored to have the opportunity to call it home.”
Craft a Professional Backup Offer Email
Subject line:
Backup Offer – [Buyer Name] for 123 Main Street
Email body:
Hi [Agent Name],
I’m submitting a fully executed backup offer on behalf of my clients for 123 Main Street. They’re still very interested in the home and ready to move quickly if anything changes with the primary.
The offer includes:
Signed contract with clean terms
Backup addendum for second position
Pre-approval from [Lender Name]
[Optional: Offer letter or brief note of intent]
Please confirm receipt when you get a moment. Happy to jump on a quick call if you have any questions.
Best,
[Your Name],
[Your Contact Info]
This type of message shows you’re organized, easy to work with, and respectful of the process—all things that listing agents love.
