How to Make an Offer

There’s nothing like that moment when you finally find the perfect house. You may be tempted to write the seller a check on the spot, but knowing how to make the right offer can make all the difference on whether or not you actually land your dream home.

Before you say a word to the seller, take a deep breath, and walk away. You don’t want to tip your hand and lose negotiating power. Go home, look realistically at how much you’re willing and able to pay, and write down your absolute maximum price. Then, prepare your initial offer.

While some sellers refuse to negotiate, many will accept 10-15% less than their asking price – and a variety of factors affect a seller’s flexibility. The older a listing, the more likely a seller will negotiate, and someone under time constraints – who needs to relocate or has already purchased a new home – may accept a lower offer more readily. Do your homework, and get as much information as you can. Are multiple houses for sale in the neighborhood? Competition may convince a seller to bargain or may reveal a property is overpriced.

As you finalize your offer, consider what you’ll get for your money. Usually, anything bolted down or connected (like a refrigerator) is included, but appliances and fixtures (like air conditioners or chandeliers) may belong to the seller. If there are any extras, or if the house will require any repairs, factor that into your offer – and don’t forget to budget for closing costs. Finally, be sure your offer price isn’t too low. Selling (and buying) a home will inevitably involve emotion, and a low offer may insult a seller and jeopardize your chance to buy the house you want.

Every state has different laws, so there’s no standard set of rules for submitting an offer. However, it should be submitted in writing and should include:

  • Your offer price, with a contingency based on financing
  • Your down payment
  • A proposed time schedule with deadlines for securing a mortgage, scheduling home inspections, completing the Sales Agreement, and an expected closing date
  • The current market interest rate, the maximum rate you can afford, and an option to nullify your contract if rates increase substantially before the sale is complete
  • A contingency that the sale depends upon a satisfactory appraisal and home inspection

If you have any concerns, a real estate agent or lawyer can review your offer for errors or omissions. When it’s ready, submit it directly to the seller or the seller’s broker, and get ready for the hard part: awaiting a response!