Question: What is a "back-up" agreement?

Answer: A property is not actually "sold" until a sale closes and title passes to another party. Unless prohibited by the sale agreement, a seller can seek a "back-up" agreement in case the original offer falls through.

A back-up agreement is a complete sales contract that includes all terms and conditions but it has no effect if the first deal succeeds. However, if the first contract fails then the back-up agreement comes into play.

Because real estate agreements sometimes fail because of financing or inspection issues, a back-up contract can open new opportunities for both buyers and sellers.