How to Make an Offer For a House

How to Make an Offer On a Home

Buying a house in today’s competitive market can be a real challenge. Potential buyers need to understand that making offers could become a routine before landing your dream house.

It’s an extreme seller’s market where a bidding war is a norm and not the exception. It’s a good idea to prepare for some disappointment before offering on a house.

Many buyers are finding out the hard way that there will be many other bidders when you make an offer on a house.

Those well prepared stand the best prospects of nailing down a new home and putting it under contract.

Making an offer on a house is an exciting prospect, but many things need to happen before you can move in. You need to take many steps before and after making offers for homes you love.

We’ll look at what you should know before you make an offer on a home. You’ll also get a good sense of what to expect on your journey to buying a house.

Remember that an offer is a binding contract, so signing on the dotted line has legal ramifications.

I hope you enjoy these tips for making an offer on a house as much as I enjoyed writing them.

Things to Do Before Making an Offer on a House

While you might assume that the first step in making an offer on a home is the search, there are a few things you need to do before that. Use these tips as a checklist before making an offer on a house.

Get a Lender Pre-approval Letter

Before buying a home, there are many things to do, and getting a mortgage preapproval is undoubtedly one.

Though it is very tempting to search property listings for homes you like, doing so before you know how much money you will have available could lead to disappointment. When you have preapproval from a mortgage lender, you can begin to search for a home seriously.

It will mean that making house offers can happen quickly once you’ve found a home that’s right for you. With your preapproval letter, sellers and their agents will take your interest in the property more seriously.

Sometimes the terms “preapproval” and “prequalification” can get confused, but preapproval is what you need to give the seller confidence in your ability to afford to buy their home.

You’ll also know exactly how much house you can afford before making a purchase offer. Keep in mind your credit score will have a significant bearing on the loan terms you receive.

Hire a Buyer’s Agent

Though it is possible to buy a home without a buyer’s agent on your side, it could be a mistake. Since the seller will generally pay the real estate commission for their agent and the buyers, there isn’t a downside.

But having someone in your corner looking out for your interests during the buying process could get you a better deal on the home. A buyer’s agent is there to protect your interests and provide the necessary research to make sound decisions.

Their experience and knowledge of the local market should help you in your search when making an offer on a house and during negotiations.

Some folks go directly to the listing agent which is a significant mistake. It creates a dual agency situation where you get no true representation.

On the other hand, a buyer’s agent is entirely indebted to you. They are your fiduciary throughout the transaction. There will be complete loyalty, accountability, and confidentiality throughout the buying process.

Proper Due Diligence is Crucial

House Offer

Before making a home purchase, it is vital to perform real estate due diligence. It would be best to learn as much about the property and neighborhood.

Understanding the history of the house will be necessary to avoid making a mistake. An excellent real estate agent will help you gather as much information as possible to make a sound decision.

A substantial part of the offer process will be gathering information beforehand. Look over any real estate disclosures carefully. Discovering major issues could save you a lot of heartaches.

For example, did the seller pull all the necessary building permits for work performed at the home? Is there something nearby the property that could cause concern?

These are examples of what you want to discover before making a home offer.

Hire a Real Estate Attorney

If you make an attractive offer and it’s accepted, you’ll need some legal help. A real estate attorney is crucial to look over all the paperwork you’ll be signing, including the purchase and sale agreement.

Your real estate attorney will negotiate with the seller’s lawyer to finalize an agreement. Having legal advice is essential when making a house offer.

Some states, like Massachusetts, have two contracts. You will sign an offer to purchase agreement first and then purchase and sale around two weeks later.

Another good reason to have an attorney is to perform a title search to ensure there are no encumbrances.

Preparing to Make an Offer for a House

With the help of your real estate agent, you should have found your ideal home. When you are sure you want to move forward and make an offer, there are a few stages involved:

  • Plan your approach – decide on an offer amount, contingencies, and earnest money
  • Make an offer in writing
  • Negotiations

Let’s look at the different elements of making an offer.

Deciding How Much to Offer

What to Offer on a House

The next step before you make an offer for a house is to know what’s appropriate. You don’t want to be making offers willy-nilly.

Prudent consideration needs to be given to the amount you offer to the seller. You want to make a competitive offer without it being too low to avoid it being entirely disregarded by the seller.

You’ll also want to stay well within your budget, so you have room to maneuver in negotiations.

It would help if you considered many things to find the best offer price.

What Are The Market Conditions

Before putting in an offer on a house, you need to know what the local real estate market is like. Is it a seller’s market or a buyer’s market? If it is a competitive housing market, you may need to make a higher offer than you want to.

On the other hand, if it is a buyer’s market, your house offer might differ.

Your agent can advise you of the current local market conditions that will affect the amount you offer.

Your buyer’s agent can create a comparative market analysis to show what similar homes have sold for in the same area recently. This, along with homes currently on the market, can help show whether you are dealing with a seller’s or buyer’s market.

These details can also potentially indicate which direction the prices and the market are heading.

How Long Has The Home Been on The Market?

If the property has been for sale for a couple of months or longer, there is a greater chance that the seller will accept a lower offer. It is good to look at the average days on the market for the area.

You can then compare that to the home you want to purchase.

What Are The Prices of Similar Properties

If the seller has priced their home higher than comparable properties in the same area, making a lower offer could work. Look for properties that have similar amenities, as well as the number of bedrooms and bathrooms, to help you judge if the home is priced higher than it should be.

A low offer may or not be appropriate. It’s vital to get it right because a lowball offer could alienate the seller.

What is The Condition of The Property?

If renovations and repairs are required, these need to be factored into your offer price. They should be factored into your offer price if there are major issues.

Alternatively, you can ask the seller to deal with these expenses or add other concessions to make up for the home’s condition.

On the other hand, if the property is a turnkey house, you’ll have to adjust your offer accordingly.

Are There Other Interested Buyers?

If you have competition to buy the home you love, you’ll need to offer more. Your real estate agent should be able to give you some good advice on what to do so you have a better chance of having your offer accepted.

When the real estate market is heavily skewed towards sellers, buyers will often do crazy things for their offer to win. It is not unusual to see buyers making a cash offer, waiving home inspections, or having an appraisal gap clause with their bid.

Some buyers will also insert an escalation clause into the purchase agreement in hopes of being the winning offer. These things should be discussed with your real estate agent before making offers.

Even if the seller accepts an offer from another buyer, it might be worth you making a backup offer. There is a chance that the initial offer will fall through, allowing your backup offer the opportunity to succeed.

How Much Earnest Money Should You Offer?

How Much Earnest Money With an Offer

Another vital consideration when making offers for houses is earnest money.

Earnest money is the cash you offer as a deposit so that the seller can confidently take their home off the market. It shows good faith to the seller and is placed in an escrow account until the sale closes or the contract is torn up.

This money can contribute to your down payment or closing costs on closing day.

What a seller might expect in earnest money will vary in different places, but it could be 1% to 5% of the purchase price.

If you want your offer to look better, one way to do so is often more earnest money. Doing so shows the seller that you have the finances to complete the purchase and could make your offer look more appealing.

Choosing Your Contingencies

Contingencies allow you to get your earnest money deposit back should something go wrong during the purchase transaction.

One of the most common real estate contingencies is a home inspection. If a home inspector finds severe issues with the home, a buyer can walk away with their earnest money returned thanks to a home inspection contingency.

It is not uncommon to negotiate home inspection issues unless it is an extreme sellers’ market.

There are other contingencies to do with financing, home appraisals, and the title. Not all these contingencies will be relevant to your situation, however.

You will not need a finance or appraisal contingency if you buy with cash, as you do not have a mortgage loan.

If you buy a home in a seller’s market, there will be pressure to have fewer contingencies. Giving up contingencies will mean more risks and a greater chance of losing your earnest money.

Your Budget is Still Important

The amount you have been preapproved for is essential, but you shouldn’t try to spend all of the home loan available. Just because your lender thinks you can afford a certain amount doesn’t mean that you’ll be able to live comfortably with those monthly mortgage payments.

If you offer the total amount you have available, it also leaves you with nowhere to go should you need to negotiate. If you need to make repairs after you move in or want to add upgrades, you may not have the money available.

How to Put an Offer on a House When You Already Own One?

One of the most common questions real estate agents get is how to buy and sell a home simultaneously. Unless you can afford to carry two mortgages at once, buying and selling a home at the same time is challenging.

Don’t expect a seller to accept a home sale contingency. It rarely ever happens, even in buyer’s markets.

Most people get their current home pending first and then actively look for a replacement.

Buying a house before selling your first home can be done. It just needs to be planned well.

Your Offer Letter Should Include Certain Items

Once you have decided on your offer amount and the other essential details, a letter can be created to send to the seller. Your real estate agent will help with this, and it should include the following information:

  • The address of the property
  • Your details such as name and current address
  • Your offer
  • The earnest money deposit amount
  • The contingencies you require
  • Any seller concessions you would like
  • Items in the home that you would like to be included in the sale
  • The expected dates of when you’re going to close and move in
  • A deadline for the seller to respond to your offer
  • Your home loan preapproval letter
  • Any required disclosures must be signed, such as a seller’s disclosure or lead paint form.
  • A copy of your earnest money deposit check
  • Possibly a letter to the seller about why you love the house – it is advisable to keep your photo, familial status, race, and religion out of the letter.

Your agent will pass on the offer letter to the seller’s agent or the seller.

You should expect to get a response to your real estate offer in the specified amount of time in the contract.Click To Tweet

What Happens After Your Offer Has Been Submitted?

Once you have decided to make an offer on a home, it will be submitted to the listing agent through your buyer’s agent.

 House Offers Are Negotiated

Four things can happen when the seller gets your offer. They can just accept it, reject it, or come back with a counteroffer.

Your Offer is Accepted

If the seller is happy with the offer you have given them, they can accept, and you can sign the sales contract. You’ll hand over the earnest money to your agent, who will then deliver it to the listing agent.

You will need to start the home loan process with your lender and hire a home inspector.

The Offer is Rejected

Perhaps your offer was too low, or you had too many contingencies, but it won’t be enjoyable whatever the reason. It will mean continuing your search for a home that meets your requirements, but you might find a better property.

It is also better to stick to your budget rather than overextending your finances to try and make sure you get home you can’t afford.

No matter how perfect you think, the home is, if the monthly payments stretch your income to a breaking point, you can see that ideal home being foreclosed.

You Receive a Counteroffer

The seller could counter your offer with their own. It is then up to you to decide how things proceed. Perhaps you are happy with the seller’s offer on the table, and you can accept. Otherwise, your real estate agent can begin negotiations to try and get to a situation where both parties are happy, and the purchase can proceed.

It isn’t just the price that may be important to the seller. Maybe the seller wants the closing date to happen faster, or they don’t want to deal with repair requests.

If negotiations can uncover what is most important to the seller, you should be able to create an offer that leads to an agreement.

Just make sure you are pleased with the agreement before signing the contract. Buying a home is a big commitment, and you need to be sure it is right for you. Otherwise, it could be a costly mistake that you’ll regret.

You’re Asked For a Best and Final Offer

When there are multiple offers on the table, you could be asked to come back with “your best and final offer.” When asked for a best and final, you need to think about the maximum amount you’re comfortable offering.

It is unlikely you will get a second chance, so you need to put your best foot forward. You’re likely to feel awful if you find out the amount of money someone else beat you by wasn’t significant.

Remember, you will likely be in the home for years. Sometime in the future, you’ll care less if you paid that much more to land the house you love.

Listing agents asking for best and final offers is commonplace in seller’s markets.

Offer Letter Template For a House

Would you like a sample letter of offer to purchase a property? Here is the standard offer letter for Massachusetts. You can get a PDF copy of a sample offer letter to buy a property by visiting the site.

Printing the offer letter right from the site should be easy.

You should be able to get a real estate offer letter for your state by doing an online search. Just search for a letter of offer real estate template and your particular state.

Delayed Home Showings Encourage Multiple Offers

Intelligent real estate agents will delay home showings in MLS until a specified date in hot real estate markets. The home goes into the multiple listing service but can’t be shown for four to five days.

It’s known as a coming soon listing. Marketing in this fashion dramatically increases the odds of multiple offers and a bidding war. Home buyers often need to put their best offer on the table or risk losing the house to another bidder.

When houses are marketed like this, there will often be a due date to submit offers.

Frequently Asked Questions About House Offers

Real Estate Offers

These are some of the most often asked questions about making offers on homes.

1. How to Make an Offer on a House Without An Agent?

You can make an offer on a home without a real estate agent, but it is not wise. Many people are under the false impression that they will save on real estate commission if they don’t have a buyer’s agent.

This is false. The seller pays real estate commissions. If you go directly to the listing agent, it doesn’t save you money. The seller is still obligated to pay the real estate company the entire commission.

Secondarily a buyer would have no representation, which could be a huge mistake. There are serious risks of buying a house without a Realtor.

2. Can You Put an Offer on a House That Already Has an Accepted Offer?

Yes, if the seller has decided to accept backup offers. Sometimes a seller will choose to no longer have showings on their home.

If you have already seen the property making a backup offer could increase your chances dramatically of landing the house. Real Estate offers often fall through, so you never know.

If the home is marked in the multiple listing service as a contingent sale, ask your real estate agent about putting in an offer.

3. How Long Does it Take For an Offer on a Home to be Accepted?

Generally speaking, once an offer has been verbally accepted between buyer and seller, it shouldn’t take longer than 24 hours to get an executed contract.

Sometimes it may take longer if there are extenuating circumstances.

4. Are You Able to Make an Offer on a House Before Preapproval?

Legally you can make an offer on a home at any time. A seller, however, is unlikely to accept house offers without a mortgage preapproval. Doing so could be a significant mistake if the buyer is not qualified to purchase.

5. Can You Put in an Offer on a Home Not For Sale?

Yes. Nothing is saying you can’t try to entice someone from selling their home. Potential home buyers often will put in a real estate offer on off-market properties.

If an offer is too good to pass up, a seller may consider it. You would probably have to give them their full asking price. To land the home of your dreams that may be worth it!

6. How to Make an Offer on a House For Sale By Owner

If you are working with a real estate agent, they can help you purchase a for sale by owner home. They will write the offer like any other property and deliver it to the seller.

If you don’t have an agent, you’ll need to write up the offer yourself. Sometimes your real estate attorney can help you construct the house offer.

7. How Do You Make an Offer on a Home More Attractive?

The easiest way to make a real estate offer more attractive is to give the seller all the terms they want. Doing so will make your offer stand out.

A cash buyer will usually be a significant factor in making an offer more appealing.

The highest price is almost always one of the most vital factors for home sellers.

8. When Should You Make an Offer on a Property?

It would be best to never put in an offer on a property until you are comfortable doing so. Rushing to put in a proposal leads to buyer’s remorse. Thoroughly think through your decision before committing to a house.

Final Thoughts on a Real Estate Offer

Understanding how to make an offer on a property is a big deal. Making your first offer is a learning experience when you are a first-time buyer. By following our guidance, you should be better positioned to have a successful transaction.

Owning your first home could be just around the corner. Best of luck!


About the author: The above Real Estate information on how to make an offer on a house was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for 35+ years.

Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.


How to Make an Offer on a House

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How to Make an Offer on a House


See how to make an offer on a house. Learn all the steps involved from start to finish before putting in a house offer.


Bill Gassett

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Maximum Real Estate Exposure

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