Chase Mortgage Guide

Making an offer

By Chase | Published: Nov 13, 2013

The buyer and seller negotiate to set a fair price for the home. You each consider the condition of the home, the value of other homes in the area, as well as market trends. Be prepared for a little give and take.

Your real estate agent is your ally in this process of making an offer—he or she does this on a regular basis, and should have the experience in the buying and negotiation processes.

Your initial offer should be based on:

  • The prices of similar homes in the same neighborhood
  • The condition of the house – how old it is, and how well maintained
  • What you can afford

Tips for writing a good offer letter

When you've found a home you love that also fits your budget, it's time to act. Working with your real estate agent, you'll give the seller a document called a purchase offer, otherwise known as an "offer letter." The primary purpose is to tell the seller how much you are willing or able to pay for the home.

Here's how to write a winning offer letter that goes beyond that basic purpose:

  • Clearly state what you're willing to pay for the home

  • If you've gotten prequalified, you should give the seller a copy of your prequalification letter along with your offer.

  • In a seller's market, consider that the seller may receive multiple offers. In this case, it's important to give the seller your very best offer.

  • State any conditions you have, such as securing the mortgage, and having the home pass inspection.

  • Make it clear how long the offer will stand: 2–3 days is standard.

  • Make it personal—include a handwritten letter explaining why you love the house so much and describe yourself briefly. You'll appeal to the seller's emotional connection to the home. This can also make a difference if the seller cares about making a choice the neighbors will be happy with.

  • It's customary to include an earnest money deposit check with your offer. The higher the check, the more seriously the seller will take your offer.

  • Consider, with your agent's advice, what concessions you might make. Can you offer to close quickly, shorten inspection periods or waive contingencies for things like appraisals or inspections? Always be careful to consider the risks of waiving contingencies before doing so.


After your initial offer, the seller will likely come back with a counteroffer. Work with your real estate agent to decide whether you can accept that offer, or want to make a new offer.

Remember that negotiation can continue as you learn more about the home. If the home inspection reveals significant water damage or a faulty heating system, for instance, you may choose to ask for money off the asking price to make up for that, or require that the issue be repaired.

Negotiating with the extras

Remember that you can use more than just the price to negotiate. Low-cost extras can also be put on the table. For instance, you may agree to the seller's price, but ask that they cover the cost of pest extermination if that's deemed necessary by the inspector (it often is), or pay for the home warranty for one year. That can save you some valuable cash and still let the seller get the price they want.

Earnest money

If you've agreed on a price and are sure the house is right for you, you can put down "earnest money" to show your commitment to buying. This is money that's entrusted to a neutral party — sometimes just a small amount, sometimes up to 5% of the asking price. If the seller rejects your offer, you get the money back. But if they accept your offer and you back out for any reason, you lose that money.

Got a real estate question?