Why should I make a back-up offer on a property already Pending? Why not just wait until the home comes back to market if the current buyer doesn't complete the purchase?

When you make a backup offer, if accepted the seller holds your offer in second position and commits to notifying you if and when your offer automatically moves into first position due to the failure of the first buyer to complete their purchase. No other buyer can come in and take your second position, nor can the seller change any terms of your agreement. And, at any time prior to that notification you have the right to terminate so that you can go purchase another property.

Only if you attain that first position is it advisable to deposit any earnest money or invest in a home inspection, and then you still maintain your right to terminate for any reason or no reason at all with a full refund of your earnest money during that inspection period. But it is still important to have a solid financing plan for that property to present to the seller with your back-up offer, so don't skip that step.

You could choose to wait and watch for that property to come back to the market in an Active status. You won't know the sale failed until it does. And it may never come back if another buyer finds a place for themselves in a back-up position making it impossible for you to have another go at the property.

Bottom Line
There's really no downside to being in a back-up position on a property you like as long as you have an experience broker drafting your offer and guiding you through the process. Just don't put all of your hopes in it. Keep looking for the next property.