How to Make an Offer on a House

Table of contents

Making your first offer on the house can be intimidating and even a little bit scary. The process doesn’t have to be either of those things, though. Making an offer on a house can be boiled down to a few easy steps. Let’s examine them.

Key takeaways

  • Determine what you’re willing to offer and take into consideration home, budget, and market considerations.
  • Set contingencies, but don’t put too many as it could cost you the house.
  • Earnest money can help your offer stand out as it shows you’re willing to invest some of your own money.
  • An offer letter is important and should contain all the important parts of making an offer.
  • Make your offer stand out by making the highest bid, putting down as much as you can, offering to close quickly, and including an as-is home inspection contingency.

The process of making an offer

Before ever making an offer, you should have already taken a few steps. The first step is getting a pre-approval to know how much house you can afford and make the offer process go smoother. After your pre-approval, you should find the right house in your pre-approval budget. Additionally, you should have a real estate agent to help you through this process.

Once you are ready, you will take the following steps:

  1. Determine what you are willing to offer for the house.
  2. Set contingencies.
  3. Decide how much earnest money to offer.
  4. Write and send an offer letter.


What is the house worth to you?

The first step is determining how much you are willing to offer. How much is the house worth to you? You might have a price point in mind, but be careful not to choose a random number.

There are several factors that go into choosing the price. Some of those factors are:

  • Home considerations – Does the house need renovations or repairs? What is the price of similar homes in the area? Is there any competition for this particular home?
  • Budget considerations – Consider how much you can comfortably afford. Don’t use the amount that’s listed on your mortgage pre-approval for this amount. Consider the monthly payment that you’d like to pay.
  • Market considerations – Your real estate agent should be able to provide you with a comparative market analysis that will tell you whether or not the current market is a buyer’s or seller’s market. Which type of market is currently dominating will determine how much you offer.


When will you walk away?

The next step in making an offer is setting contingencies. Contingencies are reasons you can walk away with your earnest money (money similar to a deposit). These contingencies can often include reasons such as financing and appraisal.

It’s important when making an offer on a home, do not to put too many contingencies into the offer. If you do put too many contingencies in the offer, it could cost you the house due to the number of obstacles.

Additionally, make sure that you always set a contingency on a home inspection. If a major defect in the house shows up during inspection, your earnest money will be safe.


What is earnest money and how can it help your offer?

If you read our blog article, “What Is A Good Faith Deposit”, earnest money is similar to a deposit put in escrow to show good faith that the buyer wants to buy the home.

Earnest money can help your offer stand out among other offers because it shows that a buyer is willing to invest some of their own money into purchasing the home. The money is similar to a deposit and is kept in escrow. The buyer may keep their deposit if a contingency is met, but otherwise, the money usually goes towards the home’s down payment.


Writing an offer to a house.


Why is an offer letter important?

An offer letter contains all of the important parts of making an offer. The letter should be drafted by your real estate agent and should contain the following:

  • The new home address
  • Names of any adults that will be on the title
  • Your offer price
  • Your contingencies
  • Concessions you’re asking for such as closing costs or repairs
  • Anything else you want to be included in the sale. These can include lighting fixtures, window treatments, etc.
  • Your earnest money deposit
  • Your mortgage pre-approval letter
  • The date for expected closing
  • The date you want to move in
  • A deadline for responding to the offer


How to make your offer stand out

No matter the offer, it’s important that it stands apart from the rest, particularly if this home is your dream home. You wouldn’t want to lose out on it because the offer didn’t catch the seller’s eye.

  1. Make the highest bid first – Make the highest bid before anyone else can beat you there. Be sure not to submit a “lowball” price because that may be flat-out rejected. Your strongest offer should be the first offer you make.
  2. Put down as much as you can – Show you are serious about buying the home by making a large down payment. The larger the down-payment on the home and the larger the earnest money deposit, the more serious you look to a seller.
  3. Offer to close quickly – Most sellers are on a timeline of their own and time can be even more important than money. Offer to close quickly and meet the sellers’ timeline and you will have an offer that will appeal.
  4. Don’t take too long for the inspection. Better yet, include an as-is home inspection contingency – An as-is home inspection contingency takes the stress off of the seller because it allows them to sell the house without making repairs. The buyer would still have a contingency allowing them to back out of the offer if the home inspection revealed something they couldn’t live with.


Making an offer on the house starts here.

Making an offer on the house can be a simple process, provided you have a few things underway first. Make sure you are preapproved for a loan and hire a real estate agent. Ensure the agent is a buyers’ agent because they will advocate for you and handle the bulk of the offer letter.

You can make an offer stand out by being sure that it is strong followed by earnest money and few contingencies. You can strengthen it even further by working on the sellers’ timeline and making sure inspection doesn’t take too long.

If you are ready to make an offer on a home, reach out to the specialists at Hero Home Programs™. They will work hard to find local and federal grants and rebates and can save homebuyers thousands of dollars with their local home buying vendors.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

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