How to Make an Offer on a House

written by Sarah Peterson
1 · 05 · 21
Make an Offer on a House

When you’re ready to officially make an offer and start negotiations, both stress and paperwork may begin to build. However, each can be significantly alleviated with the proper preparation, research, and responsiveness.

Buying a home is a pretty big deal; in fact, it’s probably the most expensive purchase you’ll ever make. That’s why verbal offers, and agreements don’t make the cut. Every detail must be agreed on and accounted for on paper.

This is where a formal offer and hopefully a purchase agreement between the buyer and seller begins. Luckily, there are many tactics to make your offer stand out among the others.

Here’s how to make an offer on a house.

Check your Financials and Get Pre-Approved

Before making an offer or even starting the homebuying journey, it’s important to evaluate your financial health and creditworthiness. This will give you a better idea of what you can afford and how a lender is likely to react.

Next, you’ll want to obtain a pre-approval letter from a qualified lender. The seller will take your offer more seriously compared to other interested buyers who have not yet been pre-approved.


The Basics When Making an Offer

Before making an offer, you’ll want to be aware of the different ways the process could further unfold.

First, your real estate agent will verbally submit your initial offer to the seller’s agent. The seller’s agent will then communicate your offer to the sellers.

From there, the sellers will do one of three things – accept the offer, decline the offer, or give a counteroffer. A counteroffer is the most common response and will require further negotiations.

If the seller counteroffers and proposes different terms, you will then have the chance to accept, decline, or counter.

This back-and-forth can go on as many times as needed before someone accepts or the sellers go with another buyer.

If an offer is accepted, things will escalate to a written purchase agreement, where all terms and contingencies are now in contract form.

At this point, you are now under contract. Typically, the home is still listed online, and the seller could entertain additional offers that come forward.


Choose Your Offer Price

Now it’s time to decide on the amount you’re willing to offer.

Much of this depends on your budget, spending power, available inventory/demand, market trends, comparable sales, and the home’s estimated value and its condition.

Keep in mind – you always want to have a strategy before making an offer. Your real estate agent can help with that.

Typically, it’s best to avoid placing your highest possible bid from the get-go. The sellers may counteroffer, and you will have no room to further negotiate.

If you end up reaching your spending limit, it’s important to state that this is your best and final offer, indicating to the sellers that you will not or cannot go higher. This tactic entails more risk for both parties.

Whatever you decide to offer or counteroffer, it’s important to feel confident that you’re not overpaying for the home or overextending yourself financially.



Contingencies are things the buyer expects to happen before signing the final contract.

In a competitive market, buyers may choose to make an offer without any contingencies to increase their chance of getting the house.

In most scenarios, however, closing is contingent on a few details. These details allow you walk away without penalty or risk of losing your earnest money deposit.



Findings from the home inspection could compel you to renegotiate or even walk away entirely. If the house has hidden problems, like a leak or rot, you can request an adjustment on the sale price or a repair.



The sale could also be contingent on an approved mortgage from your lender. You’ll want to secure the full loan amount needed to buy the home before closing.

If you do not get approved for the specified amount, it’s important that you are able to resend the offer at no cost.



If the home winds up getting appraised for less than you offered, the lending institution could decline your mortgage request. The bank will not want to give a loan for a property value that does not meet or exceed the loan amount.

Additionally, as a homeowner it’s best to avoid paying more for a house than it’s worth.


Current House Sale

If you are in the process of selling your current home, closing could be contingent on its sale. You can also specify the minimum price needed and a timeline.

If you are unable to sell your home or receive a low offer, you will be to back out of the purchase agreement with no penalty.

Submitting a Formal Offer

After you have decided on an offer amount and contingencies, your real estate agent will formally present it to the seller’s agent or sometimes directly to the sellers themselves. This can be done in person, over the phone, or through email.

Usually, agents will verbally state the offer amount and provide a document that outlines all of the underlying details.

Here’s what it typically includes:

  • The subject property’s address
  • The names of those involved in the traction (the sellers and buyers)
  • The offer amount
  • The financing details (cash or mortgage loan)
  • Desired closing timeline
  • Down payment amount and earnest money deposit (the amount in escrow prior to closing)
  • A plan to prorate taxes and utilities
  • An outline of likely closing costs and who will pay, including title insurance, survey, inspection, attorney fees, and more
  • Contingencies


Sarah Peterson


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