How To Make An Offer

Deciding How Much to Offer


You’ve set your budget, you’ve looked at homes to buy and you’ve found one you love. So how do you know how much to offer? Staying inside your budget is important, but there’s more to getting the house you want than just picking a number. Here are some things to consider when deciding how much to offer:

  • Are there comparable homes for sale in the same area? Noting how long they’ve been on the market can give you an indication of how much competition you’re facing. The more competition you have, the stronger your offer should be.
  • How long has the house been on the market? If it’s been a long time (more than two or three months) or has been listed multiple times, the seller may be more willing to accept an offer below asking price.
  • Do you expect to have to compete against other buyers? If the house is in a highly desirable area, there’s a chance you could enter a bidding war. You’ll need to decide how high you’re willing to go before you make your initial offer. If you expect the home to have other bids, it might make sense to come with your strongest offer upfront.
  • Does the house require repairs or renovations? To help you stay on budget, keep these future costs in mind.

Can I offer more than I’ve been preapproved for?


Your preapproval letter will state the amount that you’re preapproved to borrow from the lender. You can offer a greater amount, but you’ll likely need a larger down payment to make up the difference. It’s probably a good idea to check with your lender first to make sure you can get approved for a higher amount should your offer get accepted.


What to Include in Your Offer


When you’re ready to make an offer, your real estate agent can help you get in touch with the seller and submit the offer in writing. Chances are your real estate agent will write the actual offer letter, but here are some details it will include:


  • The address of the home
  • Your name and the names of anyone buying the house with you, like your spouse
  • The amount of your offer
  • Any contingencies you’re requesting (i.e., conditions that must be met before the sale is a done deal), such as a successful home inspection
  • Any seller concessions you’d like (i.e., things you’re requesting from the seller), such as cash toward closing costs
  • Items you want to include in the sale, like appliances and window treatments
  • The amount of your earnest money deposit
  • Your preapproval letter, so the seller will know that you won’t run into any financing problems
  • The date you expect to close
  • The date you want to move into the house
  • The deadline to respond to your offer

Can I ask the seller to make repairs to the house before I buy it?


Yes – it’s common for buyers to ask the seller to complete repairs as a contingency for you buying the house. You can also request that they make upgrades, like installing new carpet, but keep in mind that this could drive your purchase price up.


How to Negotiate the Purchase Price


If the seller accepts your initial offer, then great – you just bought a house! Your lender will send you a Loan Estimate outlining the fees and costs of your loan, but keep in mind these numbers could change up to 10% prior to closing the loan. Before you close, your lender will send you a Closing Disclosure detailing your final numbers so you can see exactly what you’re paying for.

If the seller counters your first offer or even just rejects it, how to proceed is up to you. Your agent can get in touch with the sellers to see how willing they are to negotiate, and you may trade counteroffers that negotiate not just the purchase price, but the other parts of your offer like the move-in date.

Negotiating can be stressful, so it’s important to keep your goals in mind. Don’t forget that it’s OK to walk away if you and the seller can’t agree. There will always be another house. This is a long-term purchase, so you should take a long-term view.