A backup offer is a secondary offer submitted by a potential buyer for a property that is already under contract with another buyer. In the event that the primary offer falls through due to contingencies, financing issues, or other reasons, the backup offer automatically moves into the primary position. This allows the seller to move forward with the sale without relisting the property or seeking new offers, and provides the backup buyer an opportunity to purchase the property without competition.
Related real estate terminology:
Contingency
Purchase agreement
Due diligence
Earnest money deposit
Right of first refusal
Counteroffer
Multiple offers
Escrow
References:
- Investopedia: Understanding Backup Offers in Real Estate
- Realtor.com: The Importance of Backup Offers
- Zillow: How Backup Offers Work and What They Mean for Buyers and Sellers
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