Should you make or accept a backup offer on a home sale?

As a home buyer, finding out that a home you love already has an accepted offer can be tough. If you’re a seller, having accepted an offer is a great step forward, but what happens if the deal falls through?

Home purchase transactions can fall through for all sorts of reasons, from contingencies not being met to financing issues. Regardless of the position you’re in, you can consider a backup offer.

Backup offers might come with risks, but if the initial home sale falls through, it can be a great way to buy or sell a house. Here’s what you need to know about making or accepting a backup offer on a home.

What is a backup offer in real estate?

A backup offer is an additional offer on a home that’s currently under contract with a different buyer. For sellers, a backup offer allows you to have a “backup” buyer if the original home sale contract falls through.

For buyers, it’s a legally binding contract that, if the seller accepts, will put you next in line to purchase the home should the first buyer back out. In many states, you’ll make an earnest money deposit into an escrow account in exchange for being the next buyer in line for the home.

You may see the terms “under contract  – accepting offers” or “pending.” These mean that the seller is still showing the home in case the contingencies included in the first contract aren’t met. A backup offer is only official if you have signed a contract with the seller.

 If the transaction successfully closes, both parties will have fulfilled their obligations under the contract. The earnest money held in escrow will be applied toward the purchase price or closing costs.

How do buyers make a backup offer on a house?

Making a backup offer is similar to making a regular offer. You and your agent will work closely to draft an offer letter that includes your offer price, down payment amount, and earnest money deposit, among other things. Your agent may suggest putting down a higher earnest money deposit or waiving certain contingencies to make your offer more appealing.

Sellers consider a backup offer just like they would a primary offer. It’s important to work with an experienced local real estate agent who can help you make a competitive offer that stands out.

Price the backup offer appropriately

The first step in making a backup offer is pricing the offer accordingly. Your real estate agent will have a good idea of what offer price will stand out, taking into consideration whether it’s a buyer’s market or a seller’s market, how competitive the local market is, and if the home is accurately priced.

Making an offer in a buyer’s market

If you’re in a buyer’s market, where there are more homes for sale than available buyers, you may be able to make an offer at or slightly below the list price. A seller may be more inclined to accept the backup offer under these conditions, rather than risk needing to reenter the market if the primary offer falls through.

Making an offer in a seller’s market

In a seller’s market, where there are more buyers than homes for sale, you may have to offer more than the asking price. Bidding wars are more common in a seller’s market, so you may want to make an offer that exceeds the asking price in order to stand out.

In hot markets or on popular properties, sellers may accept multiple backup offers, typically in order of which they were accepted. Keep in mind that the further down the line you are for a backup offer, the less likely you are to actually buy the home.

Present a strong offer

Just as you would when making a primary offer, make sure your backup offer is strong. Sellers often accept the highest offer, with the least number of contingencies.

Having a mortgage approval letter ready, sometimes called a preapproval letter, limiting contingencies, and pricing your offer accordingly can all show the seller you’re a serious buyer who is ready to close on the house. Sellers will also typically request proof that you have sufficient funds for your down payment and closing costs – or full proof of funds if you’re making an all-cash offer.

For all-cash buyers, that means attaching a proof of funds letter to your offer. All-cash offers may be more tempting to sellers, since they are likely to run into fewer financing issues and close faster.

However, if you submit a higher bid with an approval letter indicating how much a lender will loan you, it could still win over the seller.

Mortgage approval with Rocket Mortgage

You can obtain a mortgage approval letter with Rocket Mortgage.  We ask for documentation at the earliest stages of the mortgage approval process, so sellers can rest assured that our Verified Approval¹ Letter means that the buyer has been vetted and – barring any problems with the home or changes in the buyer’s financial circumstances – will be approved or we’ll pay the applicant $1,000. It’s in the fine print, which you can read below.

With a Verified Approval letter, home buyers can make their offer stand out from the pack of mortgage-financed offers.

Can buyers or sellers withdraw from a backup offer?

If a backup agreement has not been signed by both parties, either party can walk away. Once fully executed, it becomes legally binding, and withdrawal depends on:

• Contract contingencies
• State law
• Mutual release

There can be penalties, but typically consequences involve loss of earnest money rather than broader damages.

Buyers should only make a backup offer in a real estate transaction if they’re serious about closing on it. If the primary offer does fall through, a backup offer will move into the primary position, and the closing process will begin. As a buyer, if you’re still continuing to look at homes for sale, let your agent know so they can include language in the offer that allows you to back out.

For buyers: What to consider before making a backup offer

If you’re considering making a backup offer, there are some pros and cons you should think about first.

Getting accepted means you're under contract

If your backup offer is accepted, you’ll sign a backup purchase agreement. If the primary purchase agreement falls through, you’ll likely go under contract on the home.

The odds you'll be accepted are low

The chances your backup offer will lead to a sale are slim; however, that doesn’t mean it’s impossible. According to a Redfin study, 16.3% of home purchase agreements that went under contract were cancelled in December 2025. On the other hand, NAR’s October 2025 REALTORS^® Confidence Index Survey, a study gathering info from real estate professionals, showed 7% of contracts were terminated in the last few months. While most contracts close, these figures show that a meaningful share do fall through, meaning a backup offer can sometimes lead to a sale.

It could stall your home search

Since most home purchase contracts go on to successfully close, submitting a backup offer could stall your home search. The time you spend waiting for the sale to close could be spent looking at homes that don’t have any accepted offers.

However, if you already own a home and are only interested in buying that particular property, you may get lucky with a backup offer.

It can be hard to back out of a backup offer

As mentioned above, once you’ve signed a backup purchase agreement, it can be hard to withdraw. In many cases, backup offers tie up your earnest money and can delay house hunting while you wait to see if the initial offer closes.

Even if you’re able to back out of the offer, it could take some time to get your earnest money back, which could complicate making an offer on another property.

Inspection contingencies are essential

A home inspection contingency is crucial if you’re making a backup offer, as it protects you if there is any major damage uncovered during the home inspection. Though you’ll want to be careful about including too many contingencies, an inspection contingency is important.

This contingency allows you to back out of the sale if the home inspection uncovers issues that cannot be resolved, ensuring you’re not stuck buying a home with significant damage.

If sellers won’t consider an offer with any contingencies, you may have no choice but to waive the home inspection contingency. You can and should ask for a home inspection, so you know what repairs you’ll need to make.

Understand why the initial offer fell through

If the primary offer falls through and your offer goes under contract, you should consider why the first offer didn’t work out. If there were issues on the buyer’s side, such as financing falling through, that’s less concerning than if the buyer backed out due to issues with the property.

For sellers: What to consider before accepting backup offers

As mentioned above, if you’re the seller, accepting a backup offer in a real estate deal can be very beneficial. Keep in mind that there are some potential risks to look out for.

You’ll have a buyer ready and waiting to buy

When you have a backup offer on your home, you won’t have to reenter the home selling process. If your first buyer backs out, you’ll already have another buyer waiting to take their place.

Additionally, having a backup offer can make your current buyer more motivated to close because they know there are backup buyers interested in purchasing the home.

You’re taking a market risk

You’re bound by the backup contract just as much as the buyer is. Both parties are taking what’s known as a market risk. That means that if the real estate market changes between when you signed the backup contract and when the first buyer backs out, you may no longer like the amount you’ve agreed to sell the house for.

If house prices have gone up, you may feel like you’ve lost out. If the market goes down, the buyer may suddenly find that they’ve agreed to overpay for the home.

If you’re a homeowner looking to sell in a competitive market and you think you could earn more by not accepting a backup offer, then it may be the best option to wait.

The bottom line: Consider the pros and cons of backup offers in real estate transactions

Making a backup offer can be a good idea for home buyers who are serious about purchasing a home that’s already under contract. For sellers, accepting a backup offer can be a good way to ensure you have a buyer in line if your first contract falls through.

That said, both buyers and sellers should take time to consider the pros and cons of making an offer on a home that’s already under contract. Whether this option makes sense for you depends on your circumstances and how flexible you’re willing to be.

Ready to get your offers taken seriously? Apply online today for our Verified Approval and get sellers to say yes to your next offer.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.

Refinancing may increase finance charges over the life of the loan.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.

¹Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, assets, and debt. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Rocket Mortgage’s control, including, but not limited to satisfactory insurance, appraisal, and title report/search, or if you no longer want to proceed with the loan, your participation in the program will be discontinued.

If your eligibility in the program does not change and your mortgage loan does not close due to a Rocket Mortgage error, you will receive the $1,000. This offer does not apply to new purchase loans submitted to Rocket Mortgage through a mortgage broker. Rocket Mortgage reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. Additional conditions or exclusions may apply.