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How to make an offer on a home

By | Published: Oct 14, 2009 | 38 Comments

When you find a home you'd like to buy, you'll need to write an offer for it. Follow these steps to create a successful offer.

  1. Set a price

    To write an offer, you need to know how much to offer for the home. To decide on a price, you need to know about two things: the local market and the seller.

    You can get information on both from Trulia (by looking up the ZIP code's Stats & Trends and by searching the home's address) and from your real estate agent.

    Research local selling prices for homes comparable to the one you're looking to buy. This will give you an idea of the fair market price for the home.

    Also check the history of the property -- when the seller purchased it and for how much. A seller who bought a home several years ago and has seen some appreciation in its value may be more willing to negotiate on price than a homeowner who purchased a home fairly recently and has seen little appreciation.

    If you are working with a real estate agent, ask for his or her input on what you should offer for the home.

  2. Get financing

    Unless you'll be offering to pay cash for a home (and few of us can), you'll need to take out a mortgage. Arrange to be pre-approved by a lender before submitting an offer. When you are pre-approved, you have a guarantee from a lender that they are willing to lend you a certain amount under specific terms and conditions. A seller will take an offer from a buyer who's been pre-approved more seriously than one who wasn't.

  3. Seek help

    You could go it on your own and navigate the process yourself, but you'd be smart to get the assistance of a real estate agent and a real estate attorney to ensure that your interests are protected. You also want to make sure that your written offer meets legal requirements. These requirements vary state from state, as there is no universal contract that's used.

    An offer can be presented in what's called a "Purchase Agreement." Among the information that the document should include are: the date of the offer, the address and description of the property, the price being offered for the home, finance terms (loan details, how much of a deposit/down payment will be made, etc.), escrow details, closing date, possession date and any contingencies (clauses that allow a buyer to cancel a contract without penalty).

    Among the contingencies you may want to include are: the right to get the home appraised and inspected and making the offer contingent on the buyer obtaining financing and acceptable results of a home inspection.

    You should fully understand your offer before signing it, so have your lawyer discuss with you any questions or concerns you may have about your contract.

  4. Make a deposit

    With your offer, note how much you'll be offering in a down payment.

    Arrange to have the deposit held in an escrow account (not with the seller) so your money can be returned to you should the offer fall through. If the offer is accepted, the deposit will be deducted from what you'll owe the seller at closing -- when the sale is finalized.

  5. Negotiate and finalize

    Deliver the offer to the seller or to the seller's real estate agent.

    Once your offer is submitted, all you can do is wait. The seller may be decide to accept the offer, reject it outright, or offer a counteroffer.

    If the seller offers a counteroffer, she will suggest changes such as the sale price or the possession date. You can accept the counteroffer, or submit one of your own.

    This process will continue until the seller and the buyer mutually agree, or until the offer is rescinded. Once an offer is accepted by both parties and signed, it becomes a binding contract, so it's imperative that you work with your lawyer throughout the process and understand the offer's contents fully before it is signed.


By Connie Wildasinn,  Sun Jan 31 2010, 22:38
Do yourself a favor, get a good local realtor to work with, learn the local market, and have comps run... there is no rule 3-5-7-10% of any thing...it all boils down to what is the local market doing and how does this property stack up to recent sales (3 months back) be agressive and have a stop point.. good luck
By Gloria Fridrich,  Mon Feb 1 2010, 07:41
My advice befofe you make an offer on a major purchase like a home is that you "team up" with a good buyer agent who knows the market you are buying in. Not only will they assist you in offering a price that reflects what the house is worth but they will be representing you and not the seller. This is important when negotiating not only price but repairs. The offer is only the beginning of purchasing a home. It is important to have a professional there with you through out the whole process. This will make it easier on you and is more likely to get you from offer to closing.
By Yvonne A Russell,  Mon Mar 15 2010, 14:08
A home purchase is one of the most important financial decisions you will ever make. You should be represented by your own agent in any real estate transaction. Particularly if this is your first home purchase. A buyer's agent (not the seller's agent) owes you certain legal duties including confidentiality. I've never represented both parties in a transaction because I believe there would be a perceived if not acutal "conflict of interest". This belief comes from my extensive legal background. As a Seller's agent, you already know so much about the seller, how are you supposed to equally represent the buyer and seller.
By Pamela Lattimore,  Mon Jun 14 2010, 06:58
When you are ready to purchase a home. Start with an interview of 2 - 3 Realtors in your area. Get referrals from Family and Friends. Realtors advise can be the difference between getting the home of your dreams and what may turn into a nightmare. Ask the questions that come up. No question is ever stupid or unimportant. If you are concerned - be sure to ask. Any Realtor will be happy to answer any questions or offer any advice to you anytime. If they are not - find another Realtor.
By Patricia,  Wed Jun 30 2010, 14:11
Is there a "standard" commission that realtors' get or want? I recently spoke to one in Albany, NY, where I'll be selling my home, and they said they normally charge 7% but because they know me, they're willing to take 6%. That seems high to me, but, I haven't bought or sold in more than 5 years, so I don't know if the going rate has gone up recently.
By Yitzchok Moeller,  Wed Sep 8 2010, 07:50
In my opinion the first step to placing a bid is to have an appraisal done on the property. The appraised value is what lenders look at when giving a loan. Appraisers charge a flat fee (not commission) and therefore will provide an unbiased opinion.
By Fran Rokicki,  Wed Sep 8 2010, 17:01
The price of a home is, what the buyer is willing to pay along with, what the seller is willing to accept. Once the two parties agree, you have a contract. That is "market value."
By MG,  Mon Sep 13 2010, 06:23
We are first time homebuyer,and we have a minimal knowledge about what to do. Is it ok to hire the seller's agent to represent us as a buyer? What are the pros and cons? Or is it just fine to hire our own Attorney to assist us. Thanks
By Elizabeth Paulo ,  Wed Sep 22 2010, 16:35
These are all excellent suggestions, I'd like to suggest you, as the buyer, write a brief and to the point letter as to who you are and why you chose this home. It adds a personal factor - sometimes, it's not always about the bottom line!
By Francine Turner,  Tue Nov 9 2010, 15:02
@MG - do not use the sellers agent to represent you. The sellers agent was hired by the seller to get the best price for the seller (among other things). Hire your own representative to work for you. Your attorney can assist you, however, will they negotiate for you? Good luck!
By Kirk Carothers,  Tue Feb 22 2011, 18:18
Disagree- When I buy as investment- I DO use the sellers agent. I want the house- not the commission. They will treat you both fair- I just want the property at best price. All offers go through the listing agent anyway, and if there are multiple offers, guess which one they will push through?
By Melvina,  Sat Oct 1 2011, 10:29
is these house still active would like to puhrcess cash
nw 60th ave 33313 at 16,697---sw7th
margate at 23,900-and sw 81st for30,000 please let me know as soon as posiable thank you send reply to milktone254@yahoo.com
By Mariano Simms,  Sun Nov 27 2011, 12:06
One of the first thing before making an offer, is to know what is the true value of the property, also to make sure that your financial are in place, to cover the offer price, closing cost and other related fees that may apply. A buyer doesn't need an agent to make an offer, How-ever! In most cases it is recommended to use the service of an experience agent to ensure a more trouble free transaction.
I would be more than happy to provide my service.
By Khrystyna Chorna,  Wed Dec 7 2011, 01:40
I have to say I disagree with some realtors on this page and in my opinion getting the appraisal on the property that you want to submit an offer is a little unrealistic in this market..
Who is going to pay $300-$400 for an appraisal? It is too much of an investment for the buyer. After the offer was accepted and you are in escrow - absolutely. But anytime before that - no. A lot of times buyers submit multiple offers on different properties and not get them or being outbid by other buyers, investors, etc.
In my experience the most important things in writing SUCCESSFUL offers are:
-type of financing ( cash preferred, the size of the downpayment, how reputable the lender is )
-how "clean" or aggressive the offer is ( closing costs, choice of third party entities, requests of contingency dates, etc )
-and tenacity of your agent ( finding out as much information as possible before submitting an offer, establishing a relationship with the other agent to make it the most attractive one on the table, etc )

By Shawn Ryan Rosa,  Tue Dec 13 2011, 11:09
sign written contract offer, have deposit ready, have pre-qual letter ready
By Fran Reidy,  Sun Jan 15 2012, 13:02
Where does the tax assessment values fit into the equation of market value? I am looking at a house which is similarly assessed to others in the neighborhood, but the seller is 40-50K about the assessed value.
By Rocky,  Tue Jan 17 2012, 04:58
RE Agents state the most important thing is Hiring an RE Agent.
RE Appraiers state the most important thing is an Appraisal.
What a Surprise. NOT.

We buy rehab and sell RE.
The MOST Important thing before any Offer is getting the HOUSE INSPECTION. Best direct correct information you can get.

We don't use an Agent. Once an offer is stated, use the Listing RE Agent.
In the State of Florida, once you accept the Sellers RE Agent the Agent must work just as hard for your interests. Full Disclosure of any and all informtion. It's the LAW.
Seller pays all RE costs. Seller pays all Closing Costs.

We pay Cash, and close in 30 Days everytime.
By Adrian Provost,  Mon Feb 27 2012, 17:08
Get a good real estate agent*
By Arlene Eskin,  Sun May 6 2012, 13:17
I have to disagree with the comments that advise buyers to get an appraisal, or inspection BEFORE submitting an offer. Appraisals and inspections run between $400-$600 in my area. It would add up to a lot of money if you did this on every home you are considering. You want to have an accepted offer before you make that kind of investment.
We put contingencies in the purchase and sale agreement so the buyer can back out of the deal if the home doesn't pass inspection, or appraise. Unfortunately, by the time you get to that stage you are out the fee for the inspection, or appraisal but you do get your earnest money back. Make sure the home passes inspection before you have the lender order an appraisal.
I think it helps to have a buyer's agent that knows something about construction so they can give you some idea about the condition of the home before you submit the offer.
By Arlene Eskin,  Sun May 6 2012, 13:41
I'd like to address the comment by "Rocky" from Florida who advises buyers to use the listing agent as their agent. In Washington and in many other states, the seller signs a contract (called a listing agreement) with that agent and owes their duty to them. If you as a buyer use the same agent to write the offer you are creating a "dual agency" situation. While this is legal, in Washington at least, the agent is contractually obligated to the seller, not to you as a buyer, and represents the sellers interest. That agent can write the offer but can not disclose any information to you that would hurt the seller's position.
Why not just use another agent. It doesn't cost you anything. Maybe Rocky is under the impression that he will save some money by using the listing agent. That is typically not the case. The listing agent will collect "both sides" of the commission, the listing side and the selling side, in a dual agency situation. Sometimes the listing agent will give the seller a slight discount (1% or so) but it is not worth it to go into a negotiation without representation on the chance the seller will save that small amount which would typically not be passed on to the buyer anyway.
If by some chance you have a written buyers agency agreement with that same listing agent an ethical agent would have a third agent (maybe a broker) step in to make sure everyone's interest are being represented.
By Matie,  Fri Jun 15 2012, 02:35
Find the best prices with http://www.indexpost.com/
By Julia136,  Mon Jul 2 2012, 16:59
How quickly should a Realtor get back to me if I have called, emailed or left a message?
By Julia136,  Tue Jul 3 2012, 23:22
What if we're asking for 2-3% back for closing costs? Is that a negative when submitting an offer?
By Carmen Brodeur, JD,  Wed Oct 17 2012, 11:39

If you've contacted an agent in the area that you are looking to purchase then they should get back to you right away. I'm not sure what the norm is in your area but here in Scottsdale, AZ it will definitely make an offer not look as strong if asking for closing costs. Some sellers are willing but if there are multiple offers they may go with the person not requesting assistance.
By Bonnie Cissell,  Sun Apr 21 2013, 14:37
My advice would be to team up with a good realtor to help you make the offer. They will take a look at what has sold in the area and what is currently listed to give you a realistic number you can offer. They will also compare the homes for amenities, area etc.
By Emily Magill,  Mon Jun 24 2013, 12:15
It helps to get a pre-approval letter to send in with the offer. It shows that you are not wasting anyone's time with the offer. I lend in UT, NV and TN. if you want to apply in those states, please visit: http://www.emilymagill.com and apply today!! I have also heard that it helps to write a letter to the home owner to tell them why you want the house. Often times home owner's are sensitive to who they sell their home to. And if they know why and how you adore the home, it may help you!
By Olga Mackenzie,  Thu Oct 3 2013, 12:40
Usually the market comparable report from the realtor will give you an idea what the houses are sold for in the area you are considering buying , but also it depends on how fast are the houses selling in this neighborhood.
Are you going to be in the multiply situation? Is this house offered for FHA loan?
By Olga Mackenzie,  Thu Oct 3 2013, 12:49
When you make an offer, your earnest money deposit shows how serious you are as a purchaser. Your pre-approval letter for mortgage from your lender is very important to go with the offer or proof of funds.
Again a realtor can help you with that.
I have a buyers step-by-step guide explaining the process.
By tchmusik,  Sun Nov 17 2013, 13:35
What is a good amount for ernest money if home is selling for $219K?
Is a house considered a comp if it has 3,000 to 5,000 more square feet than the house I am wanting to buy on the same street. Realtor says, "the house you want has a lot of upgrades" to make up difference..who agrees?
By Elizabeth Sagarminaga,  Sun Dec 22 2013, 10:03
A very good guide to a first time buyer. A house is a big-ticket purchase. Do not be impulsive or rash. Look before you leap. Draw up a list of factors which are essential and others which may or may not be there and then proceed to narrow down the list of houses you may want to invest in. Do a market survey and approach the best realtor in the area. If possible attend open houses. This will help you get a feel of the area and the houses. Be sure of your long term cash flows. Only then decide to make an offer on a house.
By Dwayne Marchio,  Sun Dec 22 2013, 10:05
Bad experience in Michigan - I hired a Buyer's agent who had poor negotiation skills resulting in losing a wonderful home. He did the comps which I based my offer on and then deducted/added amounts for special features, extras and needed repairs. When it was all said and done, I had a solid offer based upon data that could be backed up with justified realistic amounts. I believe he never physically presented my offer to the Selling agent since I only got a brief verbal response. In addition, he gave away my financial position and the fact that I was looking for a counteroffer to get the negotiations started which severely weakened my bargaining position. Bottom line, he is getting fired after a 14 day relationship! Do your homework and interview several agents before selecting one to act on your behalf.
By Andrew Abram,  Thu Mar 27 2014, 02:02
I am Looking for this. Nice guidelines. Thanks to share your Advise.
By Costa Blanca,  Fri May 23 2014, 12:16
in my view, setting the right price on your property is the key element of success
By Mark Saunders,  Tue Feb 3 2015, 10:45
Look for comps to help with your offer / consider if your asking seller for closing help
By islamisohbet,  Tue Mar 17 2015, 08:20
bence http://sohbet.muslumanlar.com
By Jim Ronsivalli,  Mon Apr 13 2015, 05:44
Super Girl, I believe it was suggested that WHEN you find the house of your dreams, think about having it appraised by an independent. 300/400 to pay for an appraisel, than overpaying for a $600,000 home in my case as a buyer and not as an invester.
By Bob,  Mon Jan 25 2016, 09:30
Great article. I am currently in the process of home hunting and was unaware of how to make an offer on a new home. I feel as though I have a better understanding on how to make an offer on a home.

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