In Oahu's competitive real estate market, it is not uncommon to find that the home you want is already under contract. However, a backup offer can be your secret weapon for securing a property even when someone else got there first. Understanding how backup offers work in Hawaii can give you a strategic advantage in your home search.

A backup offer is a written purchase agreement that is accepted by the seller as a secondary offer, positioned behind the primary contract. If the first buyer's deal falls through for any reason, the backup offer automatically moves into the primary position. This arrangement protects sellers from having to relist their property and gives backup buyers priority over all other interested parties.

In Hawaii, backup offers are governed by the same contract forms and legal requirements as primary offers. The offer must include all standard terms such as purchase price, financing details, contingencies, and closing timeline. The key difference is that the backup offer includes specific language acknowledging its secondary position.

There are several reasons why primary contracts fall through, making backup offers more valuable than many buyers realize. Common reasons include financing failures, unsatisfactory inspection results, appraisal issues, title problems, and buyers simply changing their minds. In Hawaii's market, the percentage of deals that fall out of contract is higher than many people expect.

When submitting a backup offer, consider making it as strong as possible. A competitive price, fewer contingencies, flexible closing timeline, and evidence of strong financing can make your backup offer attractive to the seller. However, never waive contingencies that are essential to protecting your interests.

One important consideration with backup offers is that you are typically free to continue shopping for other properties while your backup offer is in place. If you find another home you want to purchase, you can usually withdraw your backup offer without penalty. This flexibility makes backup offers a low-risk strategy.

The emotional aspect of backup offers should not be underestimated. Waiting in the backup position can be stressful, as you are essentially hoping that someone else's deal falls apart. Stay focused on your overall home search and view the backup offer as one of several strategies you are employing simultaneously.

Your earnest money deposit for a backup offer is typically held in escrow just as it would be for a primary offer. If the primary deal closes successfully and your backup offer is never activated, your deposit is returned in full. Make sure you understand the specific terms regarding your deposit before submitting a backup offer.

At Kristy and Austin Home Group, we frequently help our clients submit strategic backup offers in Oahu's competitive market. Our experience helps us identify properties where backup offers are most likely to succeed and position our clients for the best possible outcome. Contact us today to learn how backup offers can be part of your home buying strategy.