You found the perfect home, made an offer and the seller accepted. You are under contract. Congratulations! I am sure that you are excited. However, when you checked the status of the home you have under contract, it is marked “accepting back-up offers.” What does that mean?

Accepted offer

Once a seller has accepted an offer on their home, it is an an important first step, but there is no guarantee that the transaction will close. During the under contract period, many things can go wrong. The buyer will need to get final approval on their loan, there is the home inspection and the appraisal. Any one of these steps might cause a problem. If a significant problem occurs at any one of these steps, the buyer may cancel the contract. Then the seller must start all over. This is why many MLS listings say, “accepting back-up offers.” But the seller is under contract. So, what does this mean for a seller to accept a back-up offer?

Pending or active back-up

After a seller accepts an offer from a buyer they have two choices. They can have their agent mark their home pending, or active back-up. A home with a pending status does not have any more showings. The seller is hoping and betting that the buyer that has their home under contract will be able to close on their home. However, the other option for the sellers is active back-up. The seller in this situation continues to allow showings and would welcome another offer. But how can they do that you ask? If the seller accepts a second offer, that second offer waits for something to go wrong with the offer in first position. Perhaps the buyer is not able to get a loan or the buyer and seller are not able to negotiate the inspection. If the first offer cancels for any reason, the back-up offer moves into first position and is allowed to proceed in purchasing the home.

Just wait

The role of the offer in back up position is to be patient and wait. That buyer needs to stay in close contact with their agent. As a back-up buyer you keep your fingers crossed and hope that something will go wrong with the first offer. The back-up buyers do nothing but wait. They do not proceeds with their loan or inspections. Remember when submitting a back-up offer, the offer is binding. You will not be able to renegotiate the terms of the contract later. Be prepared to buy the home at the agreed upon price and with the agreed upon terms.

Submitting a back-up offer on a home already under contract, that you love, is the best chance of buying that home. Only time will tell if it is possible for the home to be yours.