In a competitive North Texas real estate market—especially in places like Frisco, Prosper, McKinney, Plano, Celina, and Little Elm—homes often receive multiple offers.
When a seller has already accepted an offer, buyers still have a powerful tool they can use:
✔️ The Texas Back-Up Contract (using the TREC Back-Up Addendum)
I use back-up contracts strategically for my clients when a home is a perfect fit but already “Pending.” Back-up offers are binding, powerful, and often lead to winning the home without competing again.
Here’s exactly how back-up contracts work in Texas and when they’re worth using.
1. What Is a Back-Up Contract?
A back-up contract is a fully executed, legally binding contract that becomes the primary contract only if the first buyer terminates.
Using the TREC Back-Up Addendum, the agreements work like this:
✔️ You are under contract
✔️ You have a guaranteed place “next in line”
✔️ If the primary contract falls apart, yours automatically moves into first position
✔️ No renegotiating
✔️ No new bidding war
✔️ No need for the seller to go back on market
This gives buyers a massive advantage.
2. The Back-Up Contract Must Be Fully Signed
This is important:
✔️ Price is agreed
✔️ Terms are agreed
✔️ Deadlines are set
✔️ Both parties sign
✔️ Earnest money/option fees are defined (but NOT paid unless contract becomes primary)
You’re essentially “under contract” but on hold.
3. When Does the Back-Up Contract Become Primary?
This happens automatically when:
✔️ The first buyer terminates
✔️ The first buyer fails to meet a deadline
✔️ The first buyer’s financing falls through
✔️ The seller and first buyer mutually cancel
The date this happens is called the:
đź—“ “Effective Date of the Back-Up Contract.”
Once this occurs:
-
Your Option Period starts
-
Your earnest/option money is due
-
You move forward like a normal transaction
4. You Do NOT Pay Earnest Money or Option Money Yet
This surprises a lot of buyers.
✔️ You owe nothing upfront
✔️ No earnest money
✔️ No option money
✔️ No inspection costs
You only pay once the contract becomes primary.
This makes back-up offers low risk for buyers.
5. The Seller Can Only Accept One Back-Up Contract
Texas law allows:
✔️ 1 primary contract
✔️ 1 official back-up contract
After that, everyone else is out of line.
This is another reason getting in the back-up position matters.
6. Why Sellers Love Back-Up Contracts
Sellers benefit because:
✔️ They don’t lose momentum if the first buyer backs out
✔️ They don’t return to the market
✔️ They avoid new showings
✔️ They avoid new negotiations
✔️ They avoid “multiple offer fatigue”
This makes sellers more open to accepting a well-written back-up offer.
7. Why Buyers Should Consider a Back-Up Contract
In competitive North Texas markets, I recommend back-up offers when:
✔️ You love the home
✔️ You narrowly missed winning it
✔️ You expect the first contract to struggle
✔️ The home is unique or rare
✔️ You want to avoid another bidding war
Many buyers are surprised how often the primary contract fails.
8. Most Buyers Don’t Realize How Often Primary Contracts Fall Apart
Primary deals fall apart for MANY reasons:
✔️ Low appraisal
✔️ Financing denial
✔️ Bad inspection
✔️ Foundation issues
✔️ Roof problems
✔️ Sewer line issues
✔️ Survey problems
✔️ Title issues
✔️ HOA problems
✔️ Buyer cold feet
✔️ Lender delays
Roughly 15–25% of deals do not make it to closing.
Back-up buyers get first rights every time.
9. When a Back-Up Contract Is a Big Advantage
A) Highly competitive neighborhoods
Back-up = no competing if first deal fails.
B) Homes priced aggressively
These often have appraisal issues.
C) Homes with unusual features
High risk of inspection problems.
D) Homes requiring major repairs
Primary buyers may terminate after Option Period.
E) Homes with inexperienced agents on the other side
Deals collapse more often.
F) Homes with long closings
More time = more opportunities for primary deal to unravel.
10. You Can Cancel Your Back-Up Position Anytime Before Becoming Primary
This is key:
✔️ You can back out at any time
✔️ No fees
✔️ No penalties
✔️ No earnest money
✔️ No option money
You stay 100% in control.
11. The Risks of a Back-Up Contract
Back-up contracts are generally safe, but:
✔️ The primary deal may close successfully
→ Meaning you don’t get the home.
✔️ You may need to be patient
→ Back-up periods can last days or weeks.
Most buyers consider this low risk for the potential reward.
12. How I Write Strong Back-Up Offers
I focus on:
✔️ Seller-friendly timelines
✔️ Clean terms
✔️ Reasonable repair expectations
✔️ Flexible appraisal strategies
✔️ Strong communication with the listing agent
✔️ Understanding what the primary deal looks like (when possible)
This increases the chance the seller accepts you as the back-up.
Bottom Line: A Back-Up Contract Is One of the Smartest Tools in Texas Real Estate
It gives you:
✔️ A legally binding spot in line
✔️ Zero upfront cost
✔️ Full protection
✔️ A strong chance at the home you want
✔️ No competition if the first contract fails
Many of my buyers have won incredible homes by using this strategy—homes they otherwise would have lost.
Want a Realtor Who Knows How to Use Back-Up Contracts Strategically?
If you want an expert who can position you perfectly in a competitive North Texas market, I’d love to help.
📞 Call or Text: (254) 644-5297✉️ Email Me
