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How to Make an Offer on a Home

Read these tips to make an offer on a house with the best foot forward.
Ashley Moore
Ashley Moore Relationship Manager 4 min read
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Touring homes, popping into open houses and hunting for new listings are all important parts of the home shopping process. Once you find a place you love in your price range, it’s time to begin the exciting next step: making an offer on a home.

Knowing what the process entails can help you to be prepared to put your best offer forward — especially if you’re a first-time buyer. Here are four steps for successfully making an offer on a house:


In addition to offering more money, there are other ways to make your offer more appealing to a seller.

1. Assess your finances.

You just found the house of your dreams in a hot real estate market — naturally, time is of the essence. That said, before you get too deep into the process, ask yourself some key questions to make sure that the house is truly right for you, your needs and your financial means.

Consider the following factors:

  • Are you financially comfortable with the seller’s asking price, monthly mortgage and expenses?
  • Will purchasing a home positively impact your lifestyle?
  • Have you been preapproved by your lender?
  • Is your earnest money easily accessible?
  • Is your down payment also easily accessible? 

If your answer to these questions is yes, you are probably in a good spot to buy a home. If you proceed with making an offer, you’ll need to make a small deposit called “earnest money” that shows you’re seriously interested. The amount varies depending on the market. For example, in a buyer’s market, you may need to only put down $500 to $1,000. In a hot market, the earnest money amount can be closer to 2-3% of the sale price. Your real estate agent can offer guidance on how much earnest money to offer (fortunately, the funds go toward sale if your offer is accepted). You should also learn more about how the mortgage process works before moving forward.


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Home Inspection and Appraisal Tips
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2. Submit a written offer. 

When it comes to putting an offer together, the key component is your offer price. So, how much should you offer on a house? The answer can be pretty complex and, in the end, really depends on your finances and how comfortable you feel investing your hard-earned wages into a home. You don’t have to match what the seller is asking — depending on the market, your offer may be lower or even higher. Here are a few considerations when figuring out how much to offer on a home:

  • Is the current asking price in line with the home’s value and condition? Will there be any major renovations needed after move-in?
  • Are there other potential buyers who have confirmed interest? If so, do you have the financial leeway to offer more?
  • What have other homes in the neighborhood of similar value sold for in the last few years?
  • Is the neighborhood particularly in-demand right now? If so, be prepared to increase your offer.
  • What is the status of the neighborhood schools, stores and other amenities?

Work closely with your real estate agent on answering these questions and landing on an offer amount that makes sense given your finances, the home’s worth and the neighborhood.

While price is critical, your offer will also feature other components that are of interest to sellers. These include:

  • Your timeline for closing the sale. Again, your local market will dictate what’s normal here, but on average buyers usually offer to close the deal within three to eight weeks. For many sellers, a shorter timeline is more appealing, especially if they’ve already purchased another home.
  • Contingencies. The vast majority of home buyers include contingencies in their offers to protect themselves from the unexpected. For instance, many buyers make their offer contingent on the home passing an inspection. Other common contingencies include seller financing coming through and requiring that the home is appraised at or above the offer. Lenders can only finance a home for up to its appraisal value. If the appraisal comes in low, then your lender may require you to make up the difference between the appraisal and the sale price.
  • Giving your offer letter a personal touch. In competitive markets, sending an offer letter for a house describing why you would like to purchase it can sometimes help your case. Perhaps it reminds you of the house you grew up in, or you love the idea of raising your kids in the neighborhood. While it’s not required, many real estate agents contend that giving a bit more personal information about the buyer can help sellers discern between multiple offers.

Your offer should also include an expiration date — usually one to two days. Depending on which state you live in, you may also need a lawyer to review your offer before you submit it. 


3. Consider the counteroffer.

So you made an offer, waited anxiously for a response and then… received a no. Don’t lose heart quite yet. If the seller has made a counteroffer, then your next step is relatively straightforward: Consider if their counter makes sense for you. You can also come back with another offer of your own. If a higher price is the sticking point, then you’ll want to review your financing to ensure that you can actually afford to offer more. Raising the price can affect how much you borrow, how much you put down and your future monthly mortgage payments.

In addition to offering more money, there are other ways to make your offer more appealing to a seller. For example, you might consider shortening your closing period, if possible, which ensures that the sellers get paid more quickly. You can also evaluate your contingencies. But buyer beware: If you remove an inspection contingency, for instance, then necessary repairs and problems with the home become your financial responsibility. If the offer and counteroffer process becomes overwhelming, or the requests from the seller are unreasonable, remember to keep perspective; there are other houses on the market (and off the market).

4. Follow up once your offer is accepted.

At this point, you are very close to becoming a homeowner, and your opportunity to take a deep breath and celebrate is nearly here. But before you do, make sure that your offer agreement is signed; in the world of real estate, verbal agreements aren’t official or binding. You also want to transfer your earnest money and make provisions to fulfill any contingencies connected to your offer. For example, now is the time to schedule your home inspection and appraisal. You’ll also want to meet with your lender and finalize the financing.

Once these steps are complete, congratulations! You’ve bought a home. Don’t forget to do your due diligence by getting a home inspection and appraisal before move-in day.



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