A backup offer is placed on a home when the sellers have already accepted an offer to purchase the home. The first buyers have a binding contract to buy the home, but if their purchase fails for some reason, the backup offer from the second buyer is activated and they become the buyer in first position. A backup offer cannot remove a binding offer from the buyer in first position unless that transaction fails for contractual reasons.
Sellers do not have to accept backup offers and usually only do so when they are anxious about the success of the first buyer’s offer. Sellers may accept multiple backup offers, setting up a chain of buyers should the first, second or third offer fail to go through.